NEW RUBBER PACT APPEARS IN THE BALANCE

  Negotiations on a new International
  Natural Rubber Agreement, INRA, are approaching the
  make-or-break point and prospects for a future pact appear to
  be in the balance, delegates said.
      Manaspas Xuto of Thailand, chairman of the INRA
  renegotiation conference, is holding consultations with a small
  group of producers and consumers to try to resolve major
  outstanding issues. When the talks began on Monday Xuto said
  those issues should be settled by the end of the first week to
  allow time to draft an agreement during the second week.
      The talks are due to last until March 20.
      Xuto said, "There is nothing concrete yet, but the
  atmosphere is good." The discussions are expected to continue
  late into the night, and Xuto said he may hold weekend
  meetings.
      Delegates said negotiations now focus on the degree to
  which price adjustments should be automatic.
      At present, if the market price has been above or below the
  reference price (set at 201.66 Malaysian/Singapore cents a kilo
  in the current agreement) for six months, the reference price
  is revised by five pct or by an amount decided by the
  International Natural Rubber Organisation council.
      Consumers are asking that, in these circumstances, the
  adjustment be automatic at five pct or more.
      Producers want the council to have the last word and have
  resisted reducing its role in the price adjustment procedure.
      Delegates said there seems to be optimism about settling
  another issue -- that of the floor price.
      It now appears that consumers may consider dropping their
  insistence of a downward adjustment of the floor price, called
  the "lower indicative price," under certain circumstances.
      This means that any possible compromise would centre on the
  reference price, and the "may buy" (or "may sell") and "must buy" or
  "must sell" levels, without changing the "lower indicative price"
  -- which is set at 150 Malaysian/Singapore cents in the current
  pact.
      Delegates said that in exchange for consumer flexibility on
  the floor price question, producers may consider agreeing to
  another consumer proposal for more frequent price reviews -- at
  12 month intervals instead of 18 at present.
  

