BO'C
ET MON
Producers sought last year in the Council a 20% increase which they claimed was
needed to cover their increased costs since the last increase. In Kuala Lumpur
last October the Council agreed to an increase of 6.85%, and no further increase
has been granted subsequently.
In February this year, the manipulation collapsed. The Buffer Stock Manager had
to purchase large quantities of tin on both the London and Penang markets in order
to protect the floor price. By the terms of the Agreement, he is obliged to
defend the Penang floor but not necessarily that in London. By April the Council had agreed to the introduction of export controls with quotas set at a 15%
restriction on exports up to the end of the Fifth Agreement and the following
month authorised further borrowing to enable the Buffer Stock Manager to buy up
to 50,000 tonnes of tin.
In June a conference was held in Geneva under the auspices of UNCTAD since an
insufficient number of consumers had signed the Sixth Agreement. Consumers
basically comprised the EC and Japan, and represented just over 50%, as opposed to the 65% required for the Agreement to be brought into effect. There were
reservations both amongst consumers and producers of the viability of such a
limited agreement and the ASEAN countries led by Malaysia considered the possibility
of establishing a producer cartel in the light of insufficient representation in
the new Sixth Agreement. However, the conference decided to bring the Agreement
into force provisionally from 1 July, after Indonesian pressure on Malaysia.
By 30 June the position on signatories to the Sixth Agreement was unchanged.
recommendation by the Interim Committee of the Sixth Agreement was adopted by the
Council to impose export controls of 36% for the third quarter of 1982. The
Buffer Stock Manager was also authorised to negotiate appropriate overdraft or
stand-by facilities under the Agreement for a total additional stock of 20,000
tonnes of tin metal in addition to the normal buffer stock of 19,666 tonnes, which
reflected the current membership of the Sixth Agreement. At the end of September,
export controls were renewed for the fourth quarter at the 36% level without any further economic measures being taken.
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