NEW RUBBER PACT TO BE FORMALLY ADOPTED TOMORROW

  A new International Natural Rubber
  Agreement (INRA) will be formally adopted tomorrow, chairman of
  the negotiating conference Manaspas Xuto of Thailand said.
      "The successful negotiation of the new agreement represents
  a significant step forward in international economic
  cooperation," he told a news conference. The new INRA is to
  replace the current one which expires in October.
      Delegates at the renegotiation conference, held under the
  auspices of the U.N. Conference on Trade and Development
  (UNCTAD), reached agreement over the central elements of a new
  accord last weekend.
      Xuto said the new INRA retains the reference price -- of
  201.66 Malaysian/Singapore cents per kilo -- and indicative
  prices set in the present pact.
      Price levels will continue to be expressed in the joint
  Malaysian/Singapore currency, he added.
      The new agreement also maintains the basic structure of
  price ranges -- the "may sell" and "may buy" points at plus and
  minus 15 pct of the reference price, as well as the "must sell"
  and "must buy" zones at plus and minus 20 pct of it.
      Xuto said the new pact maintains the same objectives that
  were set in the present accord. "The most important of these are
  to stabilise prices and to achieve a balanced growth between
  demand and supply," he said. The buffer stock remains the sole
  instrument of market intervention for price stabilisation and
  its maximum capacity is unchanged at 550,000 tonnes, Xuto
  added.
      At this month's session, which was the fourth attempt in
  two years to negotiate a new INRA, the main issue to be
  resolved concerned the mechanism for adjusting the reference
  price.
      It was agreed to conduct reviews of the reference price
  every 15 months -- instead of the current 18-month intervals.
      The extent of the adjustment was also modified.
      Under the present agreement if the daily market indicator
  price has been above the upper intervention ("may sell") price
  (currently 231 Malaysian/Singapore cents) or below the lower
  intervention price ("may buy") price (171 cents at present) for
  six months, the reference price is then revised by five pct or
  whatever amount the International Natural Rubber Council
  decides.
      Under the new pact, the adjustment under these
  circumstances will be five pct unless the Council decides on a
  higher adjustment.
      Similarly, when buffer stock purchases or sales amount to
  300,000 tonnes, there would be an automatic adjustment of three
  pct under the new accord unless the Council decides on a higher
  percentage.
      Throughout the talks, which began on March 9, producers had
  strongly opposed a consumer proposal to lower the reference
  price and the "lower indicative price" (or floor price) of 150
  cents in the present pact if the buffer stock, currently
  360,000 tonnes, reached 450,000 tonnes.
      The proposal, initiated by the U.S., was withdrawn last
  Friday, setting the stage for compromise at the weekend.
      Since then negotiators have worked on the finer details of
  the new pact.
      On the question of conditions for entry into force of the
  new INRA, Xuto said it was tentatively agreed that governments
  accounting for 75 pct of world exports and 75 pct of world
  imports approved or ratified the new agreement before it became
  operational.
      The present agreement had a figure of 80 pct.
  

