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Dear editor:

I would like to expand on a couple of points in my article, "The Asian economic turmoil's impact on NR's future," (Rubber World August, 1999). The International Natural Rubber Organizations' (INRO) main objective is, "To achieve a balanced growth between the supply of and the demand for natural rubber." It aims, through intervention operations in the market, at stabilizing prices within limits agreed by both exporters and importers. This short-term measure, made more efficient by the on-going steps toward the improvement of the intervention mechanism and by the necessary backing of member countries, is the only reasonable solution to the present oversupply problem.

As stated in the article, low prices do not favor either the consuming countries or the producing countries. Low prices inhibit replanting by the producing countries, which should lead to shortages for the consuming countries. In actual fact, the evolution of the costs and the `various items quoted in the article have lead to a quasi-cessation of international financing since 1990. The states' disengagement has not been taken over by private operators. Yields stay low, replanting and new planting are scarce, and, on the other hand, the tire companies will not be able to substitute enough natural robber with synthetic rubbers for many years to come. Therefore, we are convinced that investments today in the Hevea's culture are totally justified for smallholdings, small farms and estates as well in some cases. As such, it is worthwhile to urge the political and economic leaders, together with the financial organizations and the private groups, to be aware of this situation.

We must not forget to mention the positive impact of Hevea's plantations on the environment. It is a renewable commodity source (rubber and also wood); it consumes little energy for its production; it is environmentally friendly; and it takes part in the elimination of [CO.sub.2] from the atmosphere, thus reducing the greenhouse effect.

And the cultivation of the rubber tree has a number of specificities in socioeconomic terms, too. It can be either an estate or a smallholder's crop; it offers favorable possibilities of exploitation in agroforestry systems; it is viable in certain zones where other crops are not possible because of rainfall distribution or of soil; it does provide a flexibility of cash inflow; it can help unemployment reduction in highly populated rural areas; it has an increasingly exploited wood by-product; it is a preferential path to industrialization.

Looking forward to the long-term, we have to contemplate another consequence of the current low prices and economic crisis - the lack of interest and therefore of means for investing in the cultivation of Hevea, for replanting, new planting and research, to ensure production and production sustainability for the future. The world, mainly for tires but also for many other products, will need increasing quantifies of natural rubber for still a long period of time. The present oversupply only postponed a foreseeable shortage of rubber by maybe the year 2005 (and subsequently a possible shortage of Heveawood as well). However, we believe that a fresh reflection should now take place, taking into consideration all aspects of a more balanced and integrated growth of the Asian, African and Latin American economies to foster new opportunities for a future sustainable, re-deployed and revitalized natural rubber production industry. The situation is alarming and solutions have to be found. It is of crucial importance to both exporting and importing countries.

Gerard Loyen Acting Executive Director, INRO