Financial Times

High rubber prices not sustainable
Colombo Rubber Traders' Association (CRTA) Chairman Amanda Weerasinghe called on the rubber manufacturers to take advantage of the local rubber prices, which are still above world prices and follow an aggressive marketing strategy to sell their rubber.

Addressing the CRTA's 85th Annual General Meeting recently, he said,"the local rubber prices are still above world prices, and it cannot be expected to be sustained any longer and would fall back in line with the world market prices before which the traders have to act."

A kilo of Ribbed Smoked Sheet rubber is around Rs.135 in Sri Lanka whereas in the Singapore Commodity Exchange it trades at the equivalent of around Rs. 128.

Weerasinghe said, "the government should play a major role in directing Sri Lanka as a hub for rubber in the region." The government should maintain its promise of maintaining low interest rates and implement export cess for rubber.

He said that many industrialists do not have funds to implement inventive strategies that are needed to increase their rubber production such as using various types of tapping technologies and called on the government to intervene.

Finance Minister Sarath Amunugama who was the Chief Guest at the AGM assured government support for the rubber sector and said that the government is focussing on creating new small and medium private sector companies to develop infrastructure, which can help many sectors including the rubber sector.

Amunugama said that rubber manufacturers will have to play a major role in boosting production and combine with related institutions and small and medium projects. "You are an important part of our economic policy framework as your industry reaches rural people who are at the focal point of our economic policy," Amunugama said.

Plantation Industries Minister Anura Priyadarshana Yapa who was the guest of honour, assured more support and incentives for the rubber sector and said that the government would intervene only if the private sector cannot solve problems by themselves.

He said that in order to increase Sri Lanka's share in the global market the current annual production has to be increased by 100,000 metric tonnes. "The government has decided to grant a replanting subsidy of Rs 100,000 per hectare and initiate Free Trade Agreements which the rubber traders can make use of," he said urging the entrepreneurs to take the initiative to implement new technology and turn rubber into a manufacturing industry.

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