Rubber optimism intact

While the tea industry seems to be losing its lustre, the rubber industry is enjoying a healthy boom and seems comfortably geared for the next three months as well.

Achieving prices quoted at Rs. 600 per kg during the first nine months of the year, the last quarter will follow the same healthy pattern, Colombo Rubber Traders’ Association Chairman M.S. Rahim said yesterday.

Rahim stated that prices had remained high and that even if prices were brought down in any way during the next three months, the industry would still boom. “We have had a very dry season, therefore production is heavy and they have been tapping well. Even if there is a price drop, this would be compensated by the high production, which will keep the industry afloat.”

In 2010 total production was 153,000 kilos he said. “This year will be definitely more,” Rahim acknowledged, conceding that he could not give a proper figure at this point.

Rubber exports have increased from 35-45%, from which the majority is exported as solid rubber tyres.

Rahim noted that even with the State increasing the cess from Rs. 4 to Rs. 12, prices had been holding up fine until September. Production of classic white crepe rubber was sold at over Rs. 600 per kg.

“Sri Lanka is the only country that produces this kind in such good quality. Therefore, despite the troubles in Europe, the demand for it never died,” he explained.

Even the 1X crepe rubber used mostly for Sri Lanka’s consumption traded at Rs. 450 on average.

On Minister of Industry and Commerce Rishad Bathiudeen’s statement in Parliament on rubber manufacturers asking for a hike in cess, Rahim claimed that the statement was “irrational” and was one that was unlikely to be imposed.

“If there is an increase in the cess, it will kill the market. Demand will go down rapidly as the situation anyway is a decrease in demand as most countries including China slowing down,” he said.

source - www.ft.lk