The price of the main grade latex crepe 1X went up to 521.50 rupees a kilo.
"Prices went up due to short supply in the market," said Shehan Meegama of brokers John Keells.
"There has been bad weather- heavy rains - in the past so many weeks with no dry spell. Also, demand is increasing."
Other rubber traders said supply has been affected by disruption of production at key origins like Vietnam, Thailand and India earlier this year.
Rubber prices shot up because of the short supply and then eased when production at major origins returned to normal.
Demand is also up with the end of recession and growth in countries like China and India.
Automobile production, where rubber is needed to make tires, is also recovering.
"Car sales are zooming - there's a lot of demand - that’s why prices have gone up," said a rubber dealer.
The shortage in the local market forced come manufacturers who are exempt from import duty to import rubber.
But not all manufacturers can import because of very high import duty on rubber imports.
Meegama said the supply shortage might ease and prices might drop if the present dry weather continues.
"If the dry weather continues, in the next two weeks we might see increased volumes in the market."
Brokers and dealers said that although the industry has been trying to encourage the use of rain guards to enable tapping even during rains their use was still not widespread enough.
"Also, we've been having very heavy rains. When the rain is heavy it is difficult to tap. Tappers are also reluctant to go to the field during heavy rains."
source - www.lbo.lk
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