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| Monday, 19 January 2004 |
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Rubber producers get fair price at weekly auctions by Steve A Morrell Rubber prices have now stabilised and after a bleak spell the future looks good. Not to the extent that producers would gain windfall profits, but rubber holdings could run as viable units at present auction prices. Ashok Jayawickrema Director John Keells Holdings Ltd., Rubber Brokers told the Daily News Last week that after an extended spell of poor prices the market has now stabilised and producers could look forward to viable price levels which would auger well for the Industry. At least in the foreseeable future the projections are positive, he said. China's entry into the market has influenced this positive trend, and a further salutary phenomenon which helped the Sri Lanka auction point was that Thailand crops failed because of bad weather.
Nevertheless the strong consistence of Chinese buying has been a major influencing factor which has produced this buying trend and may continue. Presently the net sales average stands at Rs. 114 per kilo with minor fluctuations experienced weekly, but nothing that the plantations sector should be concerned about, he said. At Plantation level production costs range from Rs. 70 to Rs. 80 per kilo, which under present circumstances, could realise profits of approximately Rs. 30 per kilo net. But with wage negotiations expected mid 2004 the buoyancy of present trends could quickly evaporate repeating the crisis situation which debilitated the industry not long ago.
Requesting information on improved planting material, Ashok Jayawickrema said that The Rubber Research Institute had introduced new clones but these have been planted only on limited extents, and in selected estates. These clones, when in full production would give yields of 1,300 kilos per hectare. The National yield now stands at about 950 kilos per hectare, which is nowhere near the product leaders who are India, Thailand, and Malaysia who have recorded yields of 1,800 kilos per hectare, he said. However after re-privatisation there has been an upsurge all round achievement level regardless of the lean period experienced. Factory conditions have improved, with increased number applying for ISO standards certification. At production locations the factories have resorted to strict quality controls with workers re-designated according to the demands of their job descriptions, and more within context was the orderly concept of cleanliness and smart uniforms which had pronounced impact on overall efficiency, Jayawickrema said. Reverting to the competitive edge, rubber produced in Sri Lanka could have equal status in crepe rubber. But as 60% is for local consumption, exports although in the lesser category, still fullfill a major export orders and contribute positively to the GNP. We also briefly referred to the new product Lankaprene, which he said was too early to comment, But he said that samples sent to the US were still being tested. He however added, that an accredited Laboratory was necessary. It was also necessary that timely supplies be assured. These were some of the preconditions the Any US buyer would insist on. He said that If these criteria could be met, and Lankaprene gets off the ground the Industry could see a positive upward trend. |
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