Prices to increase further:

Rubber growers fail to reap maximum benefits

Sri Lanka's rubber growers have failed in achieving maximum benefits from the bonanza in the natural rubber sector, Director Rubber Research Institute (RRI) Dr. Ashoka Nugawela told the Sunday Observer.

Today, natural rubber in the raw form is trading at around Rs. 250 per kilogram. The prices will increase further since the supply cannot meet the demand for this raw material. However, the rubber growers are not reaping the maximum benefit and the national productivity level is half of its potential, he said.

At present the national productivity level is around 1,150 kg per hectare per year, significantly lower than the potential. Therefore the majority of the rubber growers are not taking the maximum benefit from this golden opportunity.

From a well managed plantation a rubber grower could obtain around 1,000 kg yield per acre per year. With the current farm gate price this amount of rubber has a value of Rs. 250,000. However, majority of our rubber growers get only around 500 kg per acre per year, and therefore the value is just half of the potential.

Even with the attractive rubber prices the productivity levels of both smallholder and plantation sectors seem to be increasing only at a very slow rate. Growers should endeavour to adopt the agronomic practices that are capable of giving high productivity levels and obtain the maximum benefits from the current attractive trading conditions, he said.

Dr. Nugawela said that even with such sub optimal land productivity level the rubber growers are making reasonable profits and there is lot of enthusiasm in further investing in rubber cultivations.

However, today the profits are driven by the natural rubber prices and not by the optimal yield by better management and enhanced productivity. If we could achieve the latter as well we could maximise profitability as well as sustain the profitability even under adverse trading conditions. The year 2007 was a good year for the industry and the natural rubber production in the country has increased up to 117,600 metric tonnes. This is a 7.3 per cent increase compared to the 2006 production of 109,600 MT.

Encouraging price signals have marginally improved the productivity in rubber cultivation. According to data the total rubber extent of the country is 120,070 Ha and assuming 80 per cent of the extent as mature rubber, the national productivity level for the year is around 1,225 kg of rubber per hectare per annum. This is a 6.5 per cent increase compared 1,150 kg of rubber per hectare per annum in 2006.