Price increase in natural rubber prods industry
 

by Hiran H. Senewiratne

Sri Lanka's rubber industry is on an upward trend with the increase of world market prices for natural rubber. Therefore it is time to address most of the issues in the sector, Managing Director, Dipped Products N.G. Wickramaratne said.

"The lack of rubber productivity and value addition are the most important issues to be immediately addressed at this juncture, Wickramaratne told the 86th Annual General Meeting (AGM) of the Colombo Rubber Traders' Association (CRTA).

At present 60 per cent of rubber are subject to value addition therefore we should support them for the betterment of the sector, he said.

He said that current local prices for growers are highest in the region, which is a healthy situation for the entire sector along with the high world market prices.

Wickramaratne said that Sri Lanka enjoys beautiful landscape in the world and it has great potential for the promotion of tourism in such places. Wickramaratne said that the proper utilisation of existing rubber land use will promoted the cultivation in non-traditional areas and will help to improve the sector in the long run.

One of the issues we should address is in certain areas, rubber lands are being used for housing, reconstruction and infrastructure development projects which would affect the industry in the long run, he said.

Low prices and lower wages in the rubber industry resulted in an exodus of skilled workers from the sector during the last few years. But with the increase of rubber prices in the world market many people have been attracted to it which is a healthy situation, Wickramaratne said.

He also said that any bad policy implemented with a good spirit will minimise the damage and the cess for rubber replanting is somewhat similar to that. It is more effective if the government funded the Rubber Research Institute, which would have helped immensely.

The starting of the Wellassa Rubber Company by six leading companies to promote rubber in non traditional areas, is a positive initiative for the sector, Dipped Products Managing Director said. The CRTA Chairman J.B.L. De Silva said the Association has, together with other interested organisations, been constantly lobbying for the opening up of new plantations in areas hitherto thought unsuitable for rubber cultivation.

The government has made available lands in the Monaragala area. The optimistic set target set for this ambitious project is to open up 40,000 hectares by 2015, he said.

The project is now two years old, the extent of land brought under rubber is disappointing, which only opened up 146 hectares of land in the Monaragala district, he said.

'The private sector should spearhead the expansion in the rubber cultivation.

The role of the Government should be to push the private sector with the necessary incentives and reduction of procedural obstacles encountered by those engaged in these expansion projects,' he said. The Association did not oppose the basis proposition of a cess.

"On the contrary we were in favour of such a levy but we were of the view that it should be charged in a way so as not to disproportionately burden or favour any of the parties with interests in the rubber industry," De Silva said.

He said that the Association is of the view that a cess, if introduced, must be levied on each and every kilogram of rubber produced, should not be excessive so as to make Sri Lankan rubber, un competitive in price in the international market and it should be introduced and levied with advance notice of at least three months so that existing forwards sales of rubber would not be adversely affected.

They welcomed the increase of the replanting subsidy from Rs. 49,000 to Rs. 100,000 per hectare for the expansion of the rubber industry.