The two countries have said that INRO has failed to live up to their expectations and failed to prop up sliding prices. Thailand's government has launched its own four billion baht market intervention scheme to support sagging prices in the local market. Theintervention will last from January 11 to end-March. The government had piled up stocks of around 97,000 tonnes in previous rounds of intervention, but now plans to sell most of it to Chinese and Japanese buyers.

INRO's buffer stock manager Arch Roberts said on Wednesday that the grouping would go out of business if Thailand pulled out. "This news has made my heart sink," said Choositt. "I have no ideas what we should do further. " "The government may be able to intervene in the local market, but what about the world market when there is no more INRO?" he asked.

INRO comprises six rubber producing and 16 consuming countries. The world's three top producers -- Thailand, Indonesia and Malaysia -- are members. Malaysia's exit from the body will take effect on October 15. Choositt said any tumble in prices would be short term if INRO collapsed, but for the long term, it all depended on what kind of action the Association of Natural Rubber Producing Countries (ANRPC) took to stabilise world prices.

"Idon't know what measures ANRPC can take to combat any possible fall in rubber prices in that time as it has not much money," he added. The ANRPC includes eight rubber producing countries: Malaysia, Singapore, Indonesia, Papua New Guinea, Sri Lanka, India, Vietnam and Thailand.