[02 Feb] India Won't Join Rubber Body to Check Supply

India, the world's fourth-largest natural rubber producer, won't join a body of key rubber-growing nations that coordinate their actions to control supply, a top official said Monday.

India--which exported 16,000 tons of its 817,000 tons of natural rubber production in 2009--would have increased the influence of the International Tripartite Rubber Council, or ITRC, which controls about 84% of global natural rubber output.

"We will not join ITRC, though we have an open invitation," Sajen Peter, chairman of India's Rubber Board, told Dow Jones Newswires.

India and China, as well as members of the ITRC, are part of the world's largest growers' group--the Association of Natural Rubber Producing Countries, or ANRPC--which accounted for about 94% of global production in 2008.

One of ANRPC's main objectives is to improve natural rubber productivity, but it doesn't regulate supplies of the raw material in the world market, according to Indian rubber industry officials.

Peter said the entry of Vietnam, the world's fifth-largest producer, to the ITRC in January may not curtail global supply anyway, as most member nations are dependent on small farmers, who can't hold back output for long.

When rubber futures on the Tokyo Commodity Exchange fell to around Y100 a kilogram amid weak global demand in December 2008, the ITRC stepped in to reduce exports by 700,000 tons in 2009. Prices rose gradually, even though the immediate impact was limited as exports from countries such as Vietnam continued unhindered.

"Prices of natural rubber will remain firm and are likely to rise in the coming months due to a global shortfall, not because of Vietnam joining the ITRC. Moreover, curtailing supply is not a practical idea," Peter said.

Global natural rubber supplies fell around 5.1% in 2009 due to lower yields and adverse weather, ANRPC said late last month when issuing provisional estimates.

All major producing countries except China and Vietnam showed a decline in production in 2009. However, production figures for Thailand--the world's largest producer--in December and for Indonesia in November and December are yet to be finalized.

Production in Thailand was an estimated 4% lower on year during the January-November period, while in Indonesia, the world's second-largest producer, output during the January-October period fell 5.9% from a year earlier.

(Source: irco.biz)