Representatives from Thailand, Malaysia, Indonesia and Singapore have said if INRO did not raise its market intervention level in October, they would ask their governments to withdraw from the organisation, which groups top producers and consumers.

At the same time, the INRO five-day moving average price was at 183.28 Malaysian/Singapore cents a kg on June 25, close to the INRO may-buy level at 183.

The daily indicator price was at 181.87 against 181.31. INRO calculates rubber prices in an artificial currency with a value between the Malaysian cent and the Singapore cent.

If INRO entered the market, prices would go up and buyers would have to pay more for their stocks, butbuying might not increase significantly amid slumping demand, traders said.

"Demand is the key thing for the market," said one. Official data in China showed its imports of natural rubber, including latex, dropped a year-on-year 8.9 per cent to 180,000 tonnes in the first five months of 1998.In Japan, rubber imports in May alone plunged 21.41 per cent from a year ago to 37,086 tonnes.

Poor demand pulled rubber levels mostly down at the end of last week, and traders saw the downtrend continuing. In Thailand, the world's biggest natural rubber producer and exporter, traders said they expected players to stay away from the market awaiting further development from INRO.

"The demand was virtually flat. Only Japanese buyers were in the market last week. But they bought much less rubber than we anticipated," said a Hat Yai trader. Players were likely to stay on the sidelines as prices were edging closer to the INRO may-buy level, the trader said.

In Malaysia, consumers were reluctant to strike deals becauseof the volatility of the Malaysian ringgit and the Indonesian market softened with shippers and buyers on the sidelines, also awaiting INRO intervention.

Prices in Singapore staged a marginal rebound at the end of last week after previous losses, but volume was very thin and traders were convinced that the rebound would be short lived. "Dealing was extremely dull. There was nothing much going on due to uncertainty in ringgit," said a dealer in Malaysia.

Some buyers refused to take up large positions as local prices were higher than those in Indonesia."They (consumers) could have gone to Indonesia where SIR20 prices are about 10 cents cheaper from us," said the dealer.Thai traders also said that cheaper rubber in Indonesia had lured some buyers from the Thai market. But Indonesian traders did not see increased buying.

They said buyers had been asking for cheaper prices as they felt that sellers had already benefited from the stronger dollar against the rupiah."Shippers and buyers were sidelined, waitingto see whether INRO will enter the market," said a trader in Indonesia.

At the end of last week, Thai benchmark RSS3 for September shipments was quoted around 68.00 U.S. Cents per kg on FOB basis and October at 69.00 cents.The Malaysian Rubber Board said July Int. Ones RSS buy eased half a cent to 274.50 cents (68 cents) a kg and July SMR 20 buyer was down a cent at 249.50.

In Indonesia, October tyre-grade SIR20 was quoted lower, at 28.00 Cents/lb fob Belawan, at 27.78 Palembang and Surabaya and at 27.50 fob Pontianak and Jambi. Only Singapore futures posted minor gains.

August RSS3 futures moved up 2.25 cents to 72.50 cent sand September gained 1.25 cents to 72.00 cents. August TSR 20 futures edged up 0.5 cent to 60.50 cents.