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COMMITTEE ON COMMODITY PROBLEMS |
Sixty-second Session |
Rome, 12-15 January 1999 |
REPORT OF THE JOINT MEETING OF THE THIRTIETH SESSION OF THE INTERGOVERNMENTAL GROUP ON HARD FIBRES AND THE THIRTY-SECOND SESSION OF THE INTERGOVERNMENTAL GROUP ON JUTE, KENAF AND ALLIED FIBRES
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II. ECONOMIC AND POLICY ISSUES RELATING TO WORLD HARD FIBRES AND JUTE ECONOMIES
A. Review of market developments and short-term outlook for sisal, abaca, coir, jute and kenaf
B. Informal price arrangements for sisal, abaca, jute and kenaf
C. Market outlook to the year 2005
E. Report of the informal consultation on hard fibres, amsterdam, 1-2 december 1997
III. INTERGOVERNMENTAL ACTIONS ON HARD FIBRES AND JUTE
A. Commodity development activities: common fund for commodities (CFC) projects on hard fibres
B. Intergovernmental action on hard fibres and jute in other fora
1. The Joint Meeting of the Thirtieth Session of the Intergovernmental Group on Hard Fibres and the Thirty-second Session of the Intergovernmental Group on Jute, Kenaf and Allied Fibres was held from 7 to 9 December 1998 at FAO Headquarters, Rome. It was attended by delegates from the following members: Austria, Bangladesh, Brazil, Egypt, Germany, Greece, Honduras, India, Italy, Kenya, Lithuania, Madagascar, Malaysia, Mexico, Nigeria, Pakistan, Peru, Philippines, Poland, Portugal, South Africa, Sri Lanka, Sweden, Tanzania, Thailand and Turkey. Observers attended from the International Trade Centre UNCTAD/WTO (ITC), United Nations Conference on Trade and Development (UNCTAD), United Nations Industrial Development Organization (UNIDO), Asian and Pacific Coconut Community (APCC), Common Fund for Commodities (CFC), FAO European Cooperative Research Network on Flax and other Bast Plants, Federation of European Rope, Twine and Netting Industries (EUROCORD), London Sisal Association and Manila Hemp Association.
2. The Session was opened by Mr J.N. Greenfield, Director of the Commodities and Trade Division, who welcomed delegates on behalf of the Director-General of FAO.
3. The Meeting elected Mr J. Schraven (Germany) as Chairperson, Mr K.S. Mukuna (Kenya) as First Vice-Chairperson and Mr B. Dutt (India) as Second Vice-Chairperson.
4. The Meeting adopted the Provisional Agenda CCP: HF 98/1-JU 98/1.
5. The Meeting evaluated the market situation and short-term outlook for sisal, jute, kenaf, abaca and coir on the basis of documents CCP: HF 98/2-JU 98/2 and CCP: HF 98/3-JU 98/3, together with additional information provided by delegates and observers. It expressed appreciation for the documents, but observed that the complex information was not always easy to comprehend, particularly as some was provided on a calendar year basis, while some was based on crop years. The Meeting noted that prices of sisal fibre, which had remained strong through 1998, might weaken in the coming year, particularly as sisal baler twine, its traditional outlet, faced strong competition from synthetics. Export prices of jute, which recovered slightly in the second half of 1998 from the very depressed levels of early 1998, might recover further as a result of a smaller crop in the forthcoming season. International prices of abaca fibre had weakened due to the devaluation of the Philippine peso, increased production and weaker demand, but some recovery in prices had become apparent late in 1998 as supplies had become limited following hurricane damage. Demand for coir fibre and products remained weak in the importing countries.
6. The Meeting expressed concern at the intense competition from synthetics which natural fibres now faced, and it requested that attempts be made to provide members with more comprehensive information on the synthetics market in the future, as well as on prospects for imports of the natural fibres and their products. The Meeting urged member countries to cooperate in providing this information.
7. The Meeting agreed that despite possible changes in market conditions in the short run, the informal price arrangements should, so far as possible, give an indication of stability, and it consequently made the following recommendations:
8. On the basis of documents CCP: JU 97/3, CCP: HF 98/4-JU 98/4 and CCP: HF 98/5-JU 98/5 together with additional information provided by delegates the Meeting held a wide ranging review of issues pertaining to the medium-term outlook for these natural fibres. It stressed the great importance of forward-looking studies which were of considerable importance to member countries. While it appreciated the work of the Secretariat, however, it felt that the projections of production, consumption and trade to the year 2005 might need to take into account more in-depth information, revisions and analyses. Some delegates noted that these documents had been prepared at a time when prospects for the global economy had appeared more optimistic than at present. However, there were also a number of positive factors which needed to be reflected in the studies. Consequently, the Meeting felt that in order to accurately project the future for these fibres, more detailed analyses of the following factors would be required. Studies of markets for traditional and for non-traditional products in various regions of the world could shed more light on future prospects. In this connection, some delegates felt that terms such as non-traditional and diversified products needed careful definition. Prospects for pulp, specialty products from abaca and for geotextiles were identified as warranting particular attention. Recognizing the scope for expanding the share of natural fibres in geotextiles it was felt that the IGG could consider measures for promoting and enhancing the use of natural fibres in geotextiles, preferably through institutional arrangements in cooperation with producing and consuming countries. The Russian market was seen as a major area of uncertainty for traditional products. Development of new technologies and new products, as well as changes in consumption patterns, could alter the prospects for a commodity, as could national, regional and international policy changes. The Meeting recognized, however, that adequate information was not always available on new and emerging market factors, and for this reason stressed that any set of projections should be continuously revised, and it requested an updated study for the next session. It was also suggested that the role of women in coir production and in the production of jute sticks be studied. The Secretariat was requested to accommodate as many of these suggestions as possible within the resources available, collaborating where appropriate with other organizations and member countries.
9. The Meeting discussed this subject on the basis of document CCP: HF 98/6-JU 98/6 which provided a pilot case study on jute in Bangladesh. It noted that the relation of trade to food security was one of the themes addressed by the World Food Summit. The Meeting thanked the Secretariat for undertaking the study as a better understanding of the linkages between export earnings and food security could be helpful for policy consideration in producing countries. However, the Meeting felt that the study had failed to fully assess the implications of earnings from jute in Bangladesh due to certain shortcomings in the methodology used including weaknesses in the sample survey design, the unrepresentativeness of the year chosen (when jute prices were particularly low) and the omission of the value of major by-products. It therefore recommended that further work should be carried out on this subject taking into consideration the above points, including the implications of jute trading, manufacturing and exports, etc. for food security. The Meeting also requested the Secretariat to consider undertaking similar research on the other fibres.
10. The Meeting took note of the report CCP: HF 98/7-JU 98/7 which was presented to it by the Chairperson of the Consultation, Mr John Cope of the United Kingdom. It endorsed, in particular, the request that the Secretariat investigate ways by which a directory of fibre properties might be produced, and a proposal by the London-based fibre associations for promotional activities to introduce potential new uses of hard fibres to relevant industries. It took note of the offer by the Philippines for fibre testing to be undertaken in that country at its newly equipped fibre testing laboratory which had been established with assistance from UNIDO.
11. The Meeting endorsed the value of such intersessional consultations among public and private participants from producing and consuming countries which enhanced interaction on market developments and other matters of concern to the natural fibres sector. The Meeting recommended that arrangements for future intersessional consultations on jute and hard fibres be made on the basis of discussions between potential hosts, the Secretariat and the Chairperson and Vice-Chairpersons.
12. The Meeting reviewed the progress of Common Fund projects on hard fibres on the basis of document CCP: HF 98/8-JU 98/8. It noted that the Intergovernmental Group on Hard Fibres, the International Commodity Body (ICB) for hard fibres under the rules of the Common Fund for Commodities, was responsible for submitting proposals for commodity development projects to the Common Fund and for supervising the progress of these projects once implemented.
13. It noted that project activities on two coir projects, Improvement in Drying, Softening, Bleaching, Dyeing Coir Fibre/Yarn and Printing Coir Fibre and Product and Market Development of High Value-Added Coir Products had now been completed and that only final reporting remained. The Meeting expressed satisfaction at the outcome of the projects, and it stressed that action should be taken by the Project Executing Agency and the Secretariat to disseminate the results to all member countries.
14. Regarding the project Product and Market Development of Sisal and Henequen Products which had commenced early in 1998, the Meeting adopted the conclusions of the Eleventh Session of the Sub-Group of Sisal and Henequen Producing Countries that the project was making good progress, and that project activities should be extended to include a survey of the Korogwe Leaf Spot disease and a collection of information on the use of sisal in non-traditional applications.
15. The Meeting noted that activities on the new abaca project, Improvement of Fibre Extraction and Identification of Higher Yielding Varieties would commence shortly. A new project on Coir-based Building and Packaging Material was expected to commence in the first half of 1999, with activities in the first phase located in The Netherlands and the Philippines, but with the possibility of extension to other countries later. Delegates recalled that, in order to carry out the supervisory obligations of the Intergovernmental Group on Hard Fibres in respect of the project on sisal, it had decided that the FAO Secretariat should undertake project supervisory activities on its behalf between sessions of the Group. It decided that the same procedure should be followed in the case of these two new projects, with the Secretariat employing appropriate expertise to review progress at each stage of the projects.
16. In considering new proposals which might be developed for subsequent submission to the Common Fund, the Meeting adopted the recommendation of the Eleventh Session of the Sub-Group of Sisal and Henequen Producing Countries that the proposal Program for the Development of the Sisal Pole of the State of Bahia should be further developed for subsequent submission to the Common Fund. A number of suggestions were made for further development work on natural fibres, including follow-up activities to earlier projects, but it was emphasized that the Meeting could not evaluate proposals without notice, and that they must be submitted in a timely fashion, in writing to the Secretariat. Decisions could, however, be made on behalf of the Group between its formal sessions, if necessary, by its Chairperson and two Vice-Chairpersons, constituting the Sub-Group on Intersessional Matters. The Meeting noted with disappointment that grant finance from the Common Fund was becoming increasingly limited and, as many commodity development activities would not be suited to loan finance, it urged the Secretariat to seek alternative sources of funding where appropriate. It stressed that the fibre producing sectors were mainly constituted by small farmers and vulnerable groups including women. The Meeting noted also that the Intergovernmental Group on Jute, Kenaf and Allied Fibres did not have ICB status. Some delegations suggested that consideration might be given in the future to seeking such status for the Group. Others mentioned that since the negotiations on the International Jute Organization as an ICB were ongoing, it would be premature to establish a new ICB.
17. Representatives of UNCTAD, the International Trade Centre UNCTAD/WTO, the Asian and Pacific Coconut Community, the London Sisal Association and the Manila Hemp Association informed the Meeting about their activities. The Meeting expressed appreciation for the work undertaken by these bodies, and looked forward to continued cooperation so as to enhance the benefits accruing to these natural fibres from their various activities.
18. The Meeting noted that the Joint Meeting of the Intergovernmental Groups (IGGs) on Hard Fibres and on Jute, Kenaf and Allied Fibres, as provided for in the Organization's Programme of Work and Budget for 1998-1999, had been organized on an experimental basis. Therefore, the Meeting requested that its views concerning the experience be communicated to the Sixty-second Session of the Committee on Commodity Problems (CCP) to assist that body in its review of the role and mandate of the intergovernmental commodity groups.
19. The Meeting considered that the joint session of the two IGGs had its benefits as it allowed a broad exchange of views on global issues and prospects affecting these natural fibres. However, should future meetings continue to be joint, the Meeting recommended that, aside from allowing for the consideration of matters of mutual interest, meetings should also provide an opportunity for separate discussions, allowing specific time on hard fibres and on jute, kenaf and allied fibres individually, in order to take into account the special issues affecting each group of fibres. The Meeting suggested also that in addition to sessions of the Sub-Group of Sisal and Henequen Producing Countries, provision should be made for individual ad hoc consultations of producers of other fibres, in particular jute, coir and abaca on an as-needed basis in conjunction with future joint meetings in order to expedite the work of such meetings.
20. The Meeting considered that the time allocated for the Joint Meeting (two days of deliberations and a third day for the preparation and adoption of the final report) had been inadequate. It therefore proposed that the time allocated to joint meetings of two IGGs should be slightly extended in order to allow fuller benefits to participating countries, while still achieving overall savings in the conduct of sessions.
21. The Meeting adopted the Report of the Sub-Group of Sisal and Henequen Producing Countries, circulated as CCP: HF 98/9-JU 98/9, noting that the formulation of recommendations by the Sub-Group had facilitated its own work.
22. In the light of its discussion on the future role and functions of the IGGs, the Meeting agreed that the next Joint Meeting of the IGG on Hard Fibres and of the IGG on Jute, Kenaf and Allied Fibres would take place in about two years' time, the exact date and venue to be determined by the Director-General in consultation with the Chairperson, and taking into account any relevant decisions by the CCP at its Sixty-second Session on the role and functioning of its subsidiary bodies. The Meeting noted the offer of the delegation of Brazil to host a future meeting, either intersessional or a formal meeting, and the offer of the delegation of Poland to host an intersessional meeting.