Sharp increase in rubber production in 1Q, 2008

by Surekha GALAGODA

[email protected]

Rubber production increased to 36.9 kilograms during the first quarter of 2008, up 14.4% compared to the first quarter of 2007.

The demand for natural rubber increased in the domestic and international market due to the escalating energy costs.

This resulted in an increase in the number of Small and Medium scale growers of rubber.

The reasons for the increase in production are maintenance of rubber plantations, using rain guards, delaying rubber tapping during the rainy season and planting high yield varieties during 2000-2002.

All these factors resulted in an increase in rubber production recording a growth of 4.6% in productivity.

The industrial sector grew by 6% and the increase in the production of rubber was also a contributor. 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,” said RRI sources.

According to RRI sources the reason for this increase was that all abandoned rubber lands are starting to tap rubber while certain regional plantation companies use new technology such as the RRI developed rain guards.

The rubber industry is experiencing increasing prices in the world market due to heavy Chinese consumption.

For more than 30 years, a kilogram 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’s expectation to Rs. 100 a kilogram.

The current running prices in the world market for sheet rubber are Rs. 250 a kilo and Rs. 300-400 for crepe rubber.

Today most of the rubber smallholders and regional plantation companies tap rubber on a mass scale even in abandoned lands while some of them use rain guards to tap rubber during the rainy season due to the price increases.

RRI developed rain guards are being widely used by the 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 in rubber production in 2005 compared to 2004.

In 2005, the country’s total rubber production was 104,400 tonnes and in 2004 it was 94,700 tonnes. With the increase in world market prices most of the abandoned rubber lands and high yielding zones are in commercial operations.

Of the total rubber production 70 per cent is used for value added products while the balance is exported as foam or crepe rubber. Sri Lanka also imports 15,000 tonnes of rubber from India, Thailand and Vietnam too feeds the value added rubber industry.

The government has taken many initiatives to increase production by extending the rubber subsidy for plantation companies, which was only offered to smallholders in the country - under five acres. 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 would be in a position to meet the demand. The reason being that Chinese rubber consumption has increased due to the increase in the vehicle industry, which manufacture two million vehicles per year.

The present rubber re-plantation programs are under way in traditional and non-traditional areas in the country.

But the annual replanting rate is less than 2,500 hectares, which needs to be increased to 4,500 acres to meet the future demand, said RRI sources.

According to rubber industry sources 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 production by 16 per cent this year,” the sources said.