A recent meeting of the United Nations Conference on Trade and Development (UNCTAD) in Geneva has agreed on measures aimed at stabilising the world price of natural rubber.
A recent meeting of the United Nations Conference on Trade and Development (UNCTAD) in Geneva has agreed on measures aimed at stabilising the world price of natural rubber. The agreement--which takes effect in October 1980-calls for the setting up of rubber stockpiles with which to control rubber supplies and prices. The agreement is expected to influence the entire rubber trade-from the retail end in the developed world to the production side in the developing world.
SYNOPSIS: Rubber plantations, like this one in Malaysia, provide one of the most important agricultural exports for many developing nations. But, as with many other commodities, the rubber producers are faced with regular price fluctuations on the world uncertain supply and demand, along with competition from synthetic rubber.
But now, rubber producers in South East Asia and Africa have reached an agreement with the industrial nations on price stabilisation, under the auspices of UNCTAD. The agreement involves the setting-up of international rubber stockpiles. When prices fall, the stockpiles will be replenished, thus reviving the market--and when prices rise because of increased demand, the piles will be returned to the open market.
The aim is to keep rubber prices pegged at a level of one dollar per kilo (2-point-21 pounds) thus ensuring rubber producers a steady flow of income and encouraging them to modernise and improve their production methods. Total cost of financing the stockpiles is estimated at 450 million dollars (U.S.).
The reason for these moves has been the increasing use of synthetic rubber, mixed with natural rubber, in the production of domestic and industrial goods like these. However, since the manufacture of synthetic rubber involves the use of ever-more-expensive oil, there has been a renewed interest in the natural commodity. In recent years, sales of natural rubber have dropped--in fact the International Rubber Study Group has predicted a surplus of some eighty thousand tonnes in 1980. But now UNCTAD aims to bring new resilience to the natural rubber industry and the millions of people employed in it.