ITRC Agrees To Cut Supply In A Bid To Prop Up Rubber Price

Jakarta, Feb 28 (Antara) - Rubber producing countries grouped in the International Tripartite Rubber Council (ITRC) agree to control oversupply in a bid to jolt into life the rubber market. ITRC groups Thailand, the world largest producer of natural rubber, Indonesia, the second largest and Malaysia , the third largest. Oversupply in international market has caused the price of natural rubber to shrink over the past several years. "Member countries of ITRC warned of the need for immediate measure to cut the oversupply which has caused the price fall of natural rubber," Director General for International Trade Cooperation Bachrul Chairi said in a news release on Friday. Bachrul said at a five-day ITRC meeting ending on Friday the member countries discuss ways of reviving rubber market . They also discussed other important agenda to follow up results of ministerial meeting in Nov. 2014 in Kuala Lumpur, Malaysia. "The meeting discussed issues such as supply and demand balance to create price stability and ways of increasing domestic consumption of natural rubber," Bachrul said. In addition, the member countries also discussed way of strengthening cooperation with other rubber producing countries in ASEAN such as Cambodia, Laos, Myanmar, and Vietnam (CLMV), and technical preparation for forming regional rubber market. Meanwhile, Director of Cooperation of APEC and other international organizations Deny Kurnia said statistical data of the three member countries is also reviewed to avoid negative sentiment in the market on large stocks. "Accuracy of data of stocks and production as well as strict implementation of supply management scheme (SMS) are expected to reduce price fluctuation and market speculation," he said SMS will have significant impact on supply-demand balance if CLMV could take part to control supply. ITRC, therefore, continues to seek to strengthen strategic cooperation with CLMV. "The rubber price fall would hurt not only rubebr farmers in the ITRC countries but also in CLMV," Deny said. In addition to pruning supply, ITRC also cooperate in increasing domestic consumption of natural rubber . An ITRC committee, Demand Promotion Scheme Committee (DPSC), is charged with seeking to increase consumption of rubber in each member country. The member countries have agreed to a commitment to increase domestic consumption to 10 percent of their respective production. In Indonesia plan has been made to increase the use rubber in infrastructure projects and domestic rubber in rubber tire industry.