Malaysia may pull out of the International Natural Rubber Organisation (INRO) along with Thailand due to disillusionment with the world rubber body, primary industries minister Lim Keng Yaik said last week. Rubber prices in Malaysia, Thailand and Indonesia have not improved despite the sharp fall in the value of their currencies and INRO has not been able to help, Lim was quoted as saying by Malaysia's Bernama news agency. INRO, which groups the world's rubber producers with consumers, is the world's only working commodity pact with a buffer stock mechanism meant to buy and sell rubber in the market to support prices. Despite a cry by its producer members in recent months for higher rubber prices, the 24-member INRO concluded a key meeting last month without revising its benchmark to buy rubber in the market at a higher price. Thailand had said after the meeting that it was reviewing its membership in INRO. Lim said if Thailand withdrew from INRO, Malaysia may followsuit.

Lonsum cools down on crisis

Indonesian plantations firm London Sumatra (Lonsum) said last week that it will temporarily freeze an expansion programme due to large foreign debt despite the government's plan to remove an export ban on crude palm oil. Irawati Koeswara, Lonsum's investors relations officer, said the firm was taking a wait-and-see position during the currency crisis. Lonsum is one of Indonesia's largest plantation firms, cultivating, harvesting and processing palm oil, rubber, cocoa, tea and coffee. Lonsum is expected to announce by this week, or by the end of April at the latest, results of current talks between the firm and its creditors over a proposal to reschedule all of its foreign currency denominated loans. Koeswara also said a fall in revenues caused by the crude palm oil export ban, imposed by the government since January, made it hard for the company to chart plans.

Cocoa seen testing February lows

Cocoa is coming back to challenge the February trough under1,040 which stretches down to about 1,010 in mid-February. According to Susan Rigg, technical analyst with Chart Analysis, the prices could go lower still, saying that it needed to move up and take out recent highs just below 1,080 in order to be able to say that it had support from the February trough. New York coffee futures ended sharply as the return of rainfall in West Africa's cocoa-growing regions soothed traders' fears that the crop would be harmed by drought. Benchmark July slid to its lowest level in seven weeks, dragged down by waves of speculative liquidation after reports of regular downpours in top cocoa grower Ivory Coast over the last few days and more rain forecast for later this week. Commitment of Traders data released over the long Easter weekend showed speculators net long about 9,552 lots, barely changed from the previous two-week period.

Vietnam plans to import raw cashew

Vietnam aims to import 70,000 tonnes of unshelled cashew to run processing plants but the plan will betough to implement because of high prices, a Vietnam Cashew Association official said last week. "All the offers are higher than $800 a tonne and that makes our calculations for production costs and profits here complicated," the official told Reuters. He confirmed a local newspaper report about the plan to import up to 30,000 tonnes of cashew worth some $20.5 million from India between April and May. Another report said individual plants would have to pay for the imports. The official declined to give further details of the negotiations. A prolonged drought in central and southern Vietnam has hit the cashew crop and this year's total output is likely to fall by 40 per cent from 1997 to an estimated 110,000 tonnes, the state-run association said last week. The low output would not be sufficient to meet processing capacity and extra unshelled nuts would have to be imported.

German cocoa imports in January up

German cocoa bean imports from third countries in January totalled 27,712 tonnes after18,660 tonnes in December 1997 and 15,263 in January 1997, federal statistics office data showed last week. January import value was 94.85 million marks compared with 35.43 million the year before. Leading supplier was Ivory Coast with 22,756 tonnes, followed by Ghana with 1,615, Indonesia with 1,161 and Nigeria's 1,013. German bean imports from third countries in 1997 (Jan/Dec) totalled 318,331 tonnes.

US wine exports rise 30 per cent

Aggressive long-range marketing plans by US wine producers helped the dollar value of US wine exports jump 30 per cent to $425 million in 1997, an industry group said last week. The San Francisco-based Wine Institute said that in volume terms, wine exports grew 26 per cent to 60 million gallons (227.1 million liters) during the year. The United Kingdom continued to be the top market for US wine, accounting for $108 million, or a quarter of the value shipped abroad from the United States. That marked a 33 per cent jump from the $81.6 million worth of wine exported toBritain in 1996. Canada was the second-largest export market, with sales up nine per cent to $79 million. Exports to Japan, the third-largest export market, rose 26 per cent to $40 million. Other export markets experiencing significant increases were Germany, Taiwan and Switzerland. US wine exports dropped to Mexico and Thailand. Of all wine exported from the United States, 90 per cent came from California.

Japan rubber seen stuck in range

Japanese rubber futures are expected to remain stuck in a tight range this week amid a lack of fresh direction-setting factors, analysts said. Activity is likely to be stagnant until Thursday's expiry of the spot April contract, they said, adding that if the contract expires at low prices, bears may take the initiative. The April contract ended last Friday on the Tokyo Commodity Exchange (TOCOM) at 92.7 yen per kg, down 0.7 yen from the previous day's close, due to concerns that operators will not be willing to take deliveries at the expiry, they said. "The Aprilcontract may be pressured further ahead of the expiry. Other contracts are likely to move narrowly, with participants reluctant to trade actively due to a lack of fresh incentives," one broker said. The benchmark September had advanced to a high of 104.5 yen on Tocom last week, backed by worries that dry weather in rubber-producing countries may reduce supplies. But the benchmark contract failed to break through a target at 105 yen, stimulating long liquidation which pushed back prices towards 102 yen.

Vietnam coffee trade at a standstill

Vietnam's coffee trade was at a standstill last week with no deals reported as prices soared to record highs close to the levels set by London futures. The country's robusta export prices rose to trade at par or at a very small discount to London's May futures contracts last week on the back of aggressive trade short-covering. Traders said soaring prices had caused some delivery delays as it became harder to buy beans for contracts signed at bigger discounts."Exporters who closed their deals at the previous high discount now cannot get beans from farmers as they later raised their offers as well," an international trader in Ho Chi Minh City said. Benchmark Grade Two, 5.0 per cent black and broken was quoted on last Friday at $1,910-1,930 a tonne, FOB Saigon Port. One trader said there had been a quotation of $1,850 but no deal had been concluded. Vietnamese offers increased sharply to $1,950 per tonne earlier last week, up from $1,760-1,810 a week ago.

Coffee Board project

The Coffee Board has undertaken a plantation crop weather modelling project to study and find out influencing weather patterns during the Ninth plan period. The government has allocated Rs 50 lakhs for the project on which the Central Coffee Research Institute has begun work. Through such a method, the institute has started studying the effect of warm water El Nino phenomenon hitting per-summer showers. The showers have already failed the southern states, which will affect the teacrop, besides coffee. Coffee production is expected to be affected by the situation.

(Reuters, Dow Jones and our bureau)o