By Cheranka Mendis
The road ahead for the tea and rubber industry promises to be a prosperous one despite the drought, with the recession taking a backseat and spurring global buying.
Demand for Sri Lankan products in the international market is rapidly increasing as the recovery from the global recession continues. Traditional export products such as tea and rubber have especially high potential to expand their markets in the near future, Director General of Rubber Development Department, R.B. Premadasa said yesterday.
Stating that the first two months of the year had brought optimistic news to the rubber industry, Premadasa was certain that current rubber prices would show stability in the market.
At the rubber auction held on 2 March, sheet rubber prices were exceptionally good, with the best quality rubber priced at Rs. 352, the second best at Rs.347.50 and the next at Rs. 343. "This is favourable for smallholders, as the prices submitted are of a high value."
The planting sector will, however, face a backlog, with the drought situation expected to make matters worse during the May-June period.
On a global perspective, the world rubber supply is decreasing rapidly even though demand has remained unchanged. The main reason behind this is that countries such as Malaysia, Thailand and Indonesia are transforming the vast amount of land earlier allocated for rubber to oil-related industries. However, natural rubber output in Malaysia is expected to rise this year, with farmers boosting tapping to benefit from higher prices (see box).
"Malaysia is identified as one of world's giants in rubber production. But today, Malaysia has turned out more than half of its land for oil related industries. That has reduced the global rubber supply by a significant amount, which has provided opportunities for immediate action from other rubber producing countries. On that note, Sri Lanka has much to offer the world at the moment," Premadasa said.
He stated that the demand for rubber from China and India would increase during this calendar year, which would promote Lankan rubber production. "India and China are two of world's biggest natural rubber importers. There is much scope for Sri Lanka to expand our rubber export business to our leading trading partners."
Sri Lanka Tea Board Chairman, Lalith Hettiarachchi also painted a happy picture when it comes to tea production and exports. He said that the last two months had been very good, with reasonably high pricing for our products. When comparing production levels of tea during January 2010 with the same month in 2009, production has increased by almost 50 per cent, Hettiarachchi asserted, adding that the demand for Lankan tea had also risen during the past two months.
"We were initially worried that the unusually high quantity coming to auction would depress prices, but it did not happen that way," Hettiarachchi said.
What is worrying at the moment is the present weather condition. "If weather conditions remain unchanged for another couple of weeks and normal weather patterns follow after that, there would be no problem for the harvest. If not, productivity will fall."
Come April, the tea plant will have "too many leaves" growing, which could again dampen the production process, if appropriate measures are not taken.
"Many steps should be taken so that leaves will not be disturbed. We are currently in the process of calling in small growers and explaining the appropriate measures to be taken during the month of April to overcome this problem."
Expectation for the year is to achieve approximately 290-300 million kilos in production, Hettiarachchi noted. "This is close to the levels we achieved in 2009 with the sale of 290 million kilos. In 2008, though our production was 304 million kilos, revenues remained the same as in 2009."
Hettiarachchi stated that if there were no labour disruptions and other problems due to elections and the like, these numbers could be achieved quite comfortably this year.
Also planned for the year is the reintroduction of the Product Quality Certificate programme, which was dismantled in December 2008 due to lack of funds. Research has been conducted last year on protein extraction and instant tea from tea waste, which has been successful in the past and will be introduced during this year once elections are over.
source - http://www.dailymirror.lk
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