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Article Comparison - International Natural Rubber Agreement

Article 31
Review and revision of the price range

A. Reference price

1. Any review or revision of the reference price, including those following net changes in the Buffer Stock under paragraph 2 of this Article, shall be based on market trends. Immediately before the first meeting of the Council after the Agreement enters into force and every 12 months thereafter, the Buffer Stock Manager shall calculate the average daily market indicator price for the previous six months and compare this value with the two intervention prices. The date of this calculation shall be fixed at least three months in advance except for the first review and immediately precede a Council session.

(a) If the average of the six-month daily market indicator prices is at the upper intervention price, at the lower intervention price, or between these two prices, no revision of the reference price shall take place.

(b) If the average of the six-month daily market indicator prices is below the lower intervention price, the reference price shall be automatically revised downward by 5 per cent of its level and become effective the following day. Normally the Council would meet on that day and take note of the revision. The Council may review the reference price and may, by special vote, decide on a higher percentage adjustment downwards of the reference price.

(c) If the average of the six-month daily market indicator prices is above the upper intervention price, the reference price shall be automatically revised upwards by 5 per cent of its level and become effective the following day. Normally the Council would meet on that day and take note of the revision. The Council may review the reference price and may, by special vote, decide on a higher percentage adjustment upwards of the reference price.

(d) However, at the first regular session of the Council after the entry into force of the Agreement any automatic revision under Article 31, paragraph 1, subparagraph (b) or (c) shall be 4 per cent.

(e) For the purposes of the comparison, the reference price and the six-month daily market indicator price will be calculated to two decimal places.

2. Following a net change to the Buffer Stock of 100 000 tonnes since the last regular session of the Council, the Executive Director shall convene a special session of the Council to assess the situation. The Council may, by special vote, decide to take appropriate measures which may include:

(a) suspension of buffer stock operations;

(b) change in the rate of buffer stock purchases or sales; and

(c) revision of the reference price.

3. If net buffer stock purchases or sales amounting to 300 000 tonnes have taken place since (a) the last revision under paragraph 3 of Article 31 of the International Natural Rubber Agreement, 1987, (b) the last revision under this paragraph, or (c) the last revision under paragraph 2 of this Article, whichever is most recent, the reference price shall be lowered or raised, respectively, by 3 per cent of its current level unless the Council, by special vote, decides to lower or raise it, respectively, by a higher percentage amount.

4. Notwithstanding the provisions of Article 29, paragraph 4, revision of the reference price shall not result in the trigger action price breaching the indicative price.

5. Notwithstanding the provisions of Article 31, paragraph 1 and Article 31, paragraph 3, revision of the reference price shall not result in the intervention price breaching the level at which the contingency Buffer Stock will be brought into operation under Article 30, paragraph 3.

B. Indicative prices

6. The Council may, by special vote, revise the lower and upper indicative prices at reviews provided for in this section of this Article.

7. The Council shall ensure that any revision of indicative prices is consistent with evolving market trends and conditions. In this connection, the Council shall take into consideration the trend of natural rubber prices, consumption, supply, production costs and stocks, as well as the quantity of natural rubber held in the Buffer Stock and the financial position of the Buffer Stock Account.

8. The lower and upper indicative prices shall be reviewed:

(a) 24 months after the last review pursuant to paragraph 7 (a) of Article 31 of the International Natural Rubber Agreement, 1987, or in the event that this Agreement enters into force after 1 May 1996, at the first session of the Council under this Agreement, and every 24 months thereafter;

(b) In exceptional circumstances, at the request of a member or members accounting for 200 or more votes in the Council; and

(c) When the reference price has been revised (i) downwards since the last revision of the lower indicative price or the entry into force of the International Natural Rubber Agreement, 1987, or (ii) upwards since the last revision of the upper indicative price or the entry into force of the International Natural Rubber Agreement, 1987, by at least 3 per cent under paragraph 3 of this Article and at least 5 per cent under paragraph 1 of this Article, or by at least this amount under paragraphs 1, 2 and/or 3 of this Article, provided that the average of the daily market indicator price for the 60 days subsequent to the last revision of the reference price is either below the lower intervention price or above the upper intervention price, respectively.

9. Notwithstanding paragraphs 6, 7 and 8 of this Article, there shall be no upward revision in the lower or upper indicative price if the average of the daily market indicator prices over the six-month period prior to a review of the price range under this Article is below the reference price. Similarly, there shall be no downward revision in the lower or upper indicative price if the average of the daily market indicator prices over the six-month period prior to a review of the price range under this Article is above the reference price.