INRO, which groups major rubber producers and consumers, bought in Malaysia, Indonesia and London last week after the average price fell below INRO's must-buy level.

INRO calculates rubber prices in an artificial currency with a value between the Malaysian cent and the Singapore cent.

INRO sets levels it buys and sells to stabilise the market. The may-buy level is at 183 Malaysian/Singapore cents and must-buy level is at 172 cents.

The average was quoted at 170.94 cents on September 10.

It was not clear how much INRO bought but one Japanese broker estimated as much as 15,000 tonnes.

"INRO has limited funds for intervention. That's why it's asking for funds from members," said one Singapore-based trader.

"I don't think producers want to give the money, since manyhave said they want to leave INRO," said the trader with a Japanese trading house.

INRO recently called for 150 million ringgit (US$39.5 million) from member countries and industry sources have said it was unlikely INRO could raise the funds.

"INRO doesn't have enough money and there is still no demand during the crisis. How much gain can you expect?" the trader said.

Accusing INRO of failing to support rubber prices, Malaysia and Thailand are set to quit INRO and urge other member countries to join the move.

In Malaysia, fresh overseas demand and INRO intervention pushed prices up.

"INRO purchases are helping the market although gains may not last," said a trader in Malaysia.

"Prices could gain a little more this week if INRO continued to buy," said another trader.

Indonesian traders said they expected prices of SIR20 to stay firm this week over anticipation of fresh INRO buying.

"We expect prices to be firm because of the possible fresh intervention by INRO. The market has been very activelately," said one trader in Jakarta.

However, most traders agreed that Kaula Lumpur-based INRO did not have sufficient funds to buy rubber consistently.

They said what was more important was a scheduled meeting among rubber producing countries in Vietnam in November.

Thailand, the world's biggest natural rubber producer and exporter, will reduce its annual output of some 2.2 million tonnes by at least 10 per cent to help sagging world prices, a senior Thai official said last week.

The official also said other rubber producing countries had agreed to lower their output.

"Malaysia's output has been falling this year because of the slow demand. If all producing countries cut output or control supplies to the market, we may see some help for the market," said a trader at a Singapore firm.

"But for the time being, or at least before November, I don't think we will see a huge jump in prices," the trader said.

At the close of last week, the Malaysian Rubber Board quoted October RSS1 buyer at 256Malaysian cents (67 US cents) a kg. October SMR20 buyer was up a cent at 218.50 cents a kg.

In Indonesia, prices for November tyre-grade SIR20 were quoted at 25.25 US cents/lb fob Medan, Palembang and Surabaya. In Padang, rubber was quoted at 25.00 and at 24.75 in Jambi and Pontianak.