Rubber industry in dire crisis
View(s):By Sunimalee Dias
Sri Lanka’s rubber industry has been making severe losses as production is low due to the leaf and pesta disease and costs surpass net sale prices and the sector is complaining it has no money to increase wages to their plantation workers.
The leaf disease has resulted up to a 40 per cent drop in crop in any affected area in any part of the world, immediate past Chairman of the Colombo Rubber Traders Association Manoj Udugampola told the Business Times.
He noted that the cost of production is at Rs.846 for crepe rubber and the selling price or net sale price is at Rs.670 as a result of which there is a loss of Rs.176 for every kilo produced. Fertiliser costs have increased over the years from Rs.50, 000 to current prices of Rs.180, 000 per MT.
Other costs like chemical spray to address the pesta disease cost plantations Rs.25,000 per hectare, Mr. Udugampola said. The recommendation has been for the application of the chemical spray three times a year soon after re-foliation.
Rubber prices which reached a peak of Rs.1450 for crepe rubber in 2022 have now tumbled to around Rs.750.
As a result it was noted that the proposed wage hike (Rs.1,700) has only added to the concerns of the industry as most are not replanting rubber due to the high costs incurred in maintaining these plantations.
In fact, every year for the last three years there has been a 10 per cent drop on average in production, it was noted.
The erratic weather pattern has also contributed to the unhealthy conditions on the plantations causing an increase in the spread of the pesta disease with last year being recorded as the worst year for Sri Lanka’s rubber crop.
Most of the plantation companies saw about 70 per cent of the rubber plantations extent under them attacked by the disease with a leaf fall rate of 60-90 per cent. This led to poor production during the cropping period from July to January due to insufficient foliage.
But since the disease started in 2019 the industry expects this year to be better than the previous years due to improved re-foliation.
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