Rubber sector brimming with high growth potential

Hiran H. SENEWIRATNE

RUBBER: The country's rubber production will increase by six per cent and could increase further by another ten per cent if the producers use modern technology, the Rubber Research Institute (RRI) said.

"With the very high world market prices, the industry cannot meet the existing demand," Head of the RRI, Dr. L.M.K. Tillekeratne said.

He said that the reason for this increase was that all the abandoned rubber lands are starting rubber tapping while certain regional plantation companies use new technology like the RRI developed rain guards.

Dr. Tillekeratne said the rubber industry is going through a major breakthrough with the booming prices in the world market due to heavy Chinese consumption.

For more than 30 years, a kilogramme of rubber was stagnant at Rs 40, which resulted in discouraging the industry dramatically.

By the end of 2002 September prices started increasing beyond the industry expectation of Rs 100 a kilogramme.

Current running prices in the world market for sheet rubber fetches Rs 250 one kilogramme and Rs 300-400 for crepe rubber.

Today most of the rubber smallholders, regional plantation companies tap rubber in a big way even in abandoned lands while some of them use rain guards to tap rubber during the rainy season due to these price increases.

Dr. Tillekeratne said RRI developed rain guards are being widely used by Lalan Rubber Company in Kegalle, Kelani Valley Plantations and Dartonfield Estate belonging to the RRI.

According to statistics there was a six per cent increase of rubber production in 2005 as against 2004.

In 2005 country's total rubber production was 104,400 tonnes and in 2004 it was 94,700 tonnes.

With the increase of world market prices most of the abandoned rubber lands and high yielding zones are in commercial operations.

Out of the total rubber production 70 per cent is used for value added products while the balance 30 per cent are exports as foam or crepe rubber.

Further Sri Lanka also imports 15,000 tonnes of rubber from India, Thailand and Vietnam too feed the value added rubber industry.

The government has taken many initiatives to increase the production by extending the rubber subsidy for plantation companies, which was only offered to smallholders in the country for below five acres.

It is said that by 2010 there would be a huge demand in the world market. It is predicted that a three million-tonne shortfall in the world market would occur and no country is in a position to meet the demand.

The reason being that the Chinese rubber consumption has increased due to the increase in the vehicle industry, which will be manufacturing two million vehicles per year.

The present rubber re-plantation programmes are underway not only in traditional and non-traditional areas in the country. But annual replanting rate is less than 2,500 hectares, which needs to be increased to 4,500 acres to meet the future demand, he said.

According to rubber industry sources at present nearly 115,000 hectares are under rubber cultivation which is a 57 per cent decline over the figure in 1970.

"If all rubber lands used the new technology and rain guards for tapping, the country could increase the production by 16 per cent this year," Dr. Tillekeratne said.