BO C
BRIEFING FOR THE HOUSE OF COMMONS SELECT COMMITTEE ON INDUSTRY AND TRADE
VISIT TO ASEAN COUNTRIES: NOVEMBER 1982
Commodity Arrangements: Tin
MM Division, Department of Industry
Background
The ASEAN countries are important tin producers, representing between them over
half the world mine production. Malaysia alone produces about 26% of world mine
production while Indonesia and Thailand each produce about 14%. In perspective,
the UK in Cornwall produces some 1.5% of world mine production. The largest
consumer is the US; the UK is currently the sixth largest consumer and its ranking
could decline further within the next few years.
The International Tin Agreement (ITA)
The UK is a member of the current 6th International Tin Agreement and has been a
founder member of all previous Agreements since they began in 1956. The Community and all member states including the UK notified the Treaty depository that they
had provisionally applied the Sixth ITA on its entry into force on 1 July 1982.
In the present Agreement, the UK is now the third largest consumer behind Japan
and the FRG since the US and the USSR decided not to join the Sixth Agreement,
after being Members of the Fifth. China, the fifth largest consumer, is not a
Member of the International Tin Agreement. Malaysia, Indonesia and Thailand are
all members of the Sixth Agreement. The International Tin Agreement has until
recently been considered the model for other commodity agreements as well as the longest lasting but as with other commodity agreements, it has faced serious
difficulties recently. The price of tin rose 22%, to a peak of approximately £9,000, within four months from July 1981, due to the manipulation of the market
by a mystery buyer whose identity was unknown. Press speculation linked this
with ASEAN producer interests. A primary purpose of the manipulation appears to
have been to justify an increase in the intervention prices, which are decided by
the Council and determine when the Buffer Stock Manager should act in the market.
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