By Cheranka Mendis
Holidays and monsoon showers have changed fortunes of the rubber market in April, with high prices and low volume production.
Assistant Chairman of the Rubber Trading Association, M. S. Rahim stated that traders were apprehensive about the future of the market with low demand, especially against the backdrop of the financial quandary world over.
"In the world market we see low demand due to the rising economical and financial problems all over the world, especially in the European sector. The market is currently enjoying high prices, with buyers biding their time and purchasing only low amounts at a time," Rahim said.
With low production due to the rainy season, Sri Lanka's position in the world rubber market is low - so much so that the traders are expecting prices to decline in the near future. "A change in the current trend is expected if we are to better the existing situation," he said.
According to the results of the latest auction conducted last week, he asserted that the decline in process could be perceived as price stabilisation at a slightly lower level after Friday's auction, following a high of the last few weeks. "The quantities have been little less at yesterday's auction."
The auction was held two days after the previous auction. As at 27 April the volume of rubber recorded was 262 tonnes while only 189 tonnes were recorded Friday.
The main reason for the drop in quantity is twofold - the miserable weather patterns and the long stretch of holidays that greeted workers last month.
"Every day is a holiday and this has had a negative impact on the total volume production of the industry. From general elections to New Year to May Day, the large number of holidays puts the industry off track. Again during Vesak the same problem will arise, even though the impact will be milder than what was experienced," he pointed out.
"A total of 4,950 kilos have been sold on an average of Rs. 411. That is not even one third of a container," Rahim said. "The yield has been high and then it started to drop because it was too hot for plucking and now it rains. The months of April, May and June are considered the worst months for production. The industry will regain its pace again in August."
source - www.dailymirror.lk
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