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The Government should also venture into developing new areas in the Eastern and Northern Provinces, he said, where trials have been conducted and have been found to be suitable for plantations in the future.
“Bearing in mind and considering the enormous financial expenditure outlaid by the Government on infrastructure development in those regions for the benefit of its people, this is an area to be focused on by the industry and the Government.”
Priority must also be given to enhance growth in existing plantations with the ultimate aim to increase rubber production, Rahim said, as local industries are the largest consumers of rubber produced, thereby increasing foreign exchange earnings in the national interest. “Natural rubber grown and produced on fertile soil is a basic raw material for use in industry, whereas all other crops grown are consumer items,” he explained. “In today’s world, investing in new plantations is asking for a great lot to bear in patience and time, when the trend has been set to go in for quicker returns, while changing the age-old saying to the new concept ‘cash in the hand is worth two in the bush.’”
In terms of prices unlike last year, prices fetched for all rubber dropped considerably, leaving producers with much smaller margins eroded by higher cost of manipulation. The average price of rubber exported declined markedly from US$ 4.84 a kg in 2011 to US$ 3.35 per kg in 2012. The value of rubber exports in 2011 was US$ 206 million and in 2012 declined to US$ 125 million.
“Total word rubber consumption was down by 0.2% in 2012 as a result of a sustained low level of the world economic activity as stated by IRSG,” Rahim said. “However, this was not only in the case of rubber, but was passed on to all other commodities as well, and led to a steady drop in prices to fall in line with oil prices which were stable at the lower levels with mild fluctuations from time to time.”
Production in Sri Lanka decreased by 6.15 million kilos to reach 152.04 kilos in the year. The feature of the year’s production was the increase of latex crepe rubber, the country’s premium grade, which dropped to 39.73 million kilos from 64.65 million kilos in 2011, reflecting a 24.92 million kilos drop over last year.
With the smallholders’ sector consisting of 125,000 cultivators having gainful employment and enjoying very reasonable profit earned by the prevailing sale prices during the year, it is hoped that some portion of their profits will be ploughed back to further improve the yields in the future. “Credit must be given to the management companies and planters who have maintained very high standards of efficiency, subscribed to good agricultural practices, prescribed application of fertiliser, more efficient tapping techniques and wider coverage of rain guards on the estates producing high quality premium rubber,” he said.
In spite of all these efforts at efficiency, they have had to face decreased yields and productivity due to extremely poor weather prevailing during the year.
In terms of exchange rates, rates quoted by commercial banks opened for the year at Rs. 126 to the dollar and steadily increased in one month to Rs. 128.50 by the end of April. From then onwards it weakened to reach its highest rate by the end of Rs. 131.25 by end August.
Due to the strength of the rupee against the US Dollar, exporters had to market their exports on prices quoted in competition from other producing countries. However, Rahim noted that exporters have performed well by marketing rubber to traditional markets at enhanced prices, thereby earning the best value in foreign exchange, considering that world market prices declined together with the drop in production of rubber during the year. Rubber Research Institute Director Dr. W.M. Gamini Senaviratne was the Guest of Honour at the event and presented his ideas on the expansion of rubber plantations in non-traditional regions.
Pix by Upul Abayasekera
