Sri Lanka to Plant Rubber in North and East Provinces. 2011 Rubber Industry Grew 58.7pct Earning $885mn

14th March 2012, www.ft.lk

Sri Lanka is exploring the possibility of expanding the rubber industry to the former war-torn North and East Provinces, an official said yesterday.

Lands have already been allocated to be developed as plantations, according to Rubber Research Institute Director General W.M.G Seneviratne.

In 2010, around 25 acres were cultivated in the north and the Government is keen to increase this amount, he said adding that the Eastern Province target was to increase the current 300 acres to 10,000 acres by the end of this year.

Additional discussions on identifying lands and related issues were discussed at a special meeting with Government Agents on Monday.  Government Agents from the northern areas of Mullaitivu, Kilinochchi and Vavuniya are already part of the meetings. They will be part of a special steering committee to assess the feasibility of increasing rubber plantations in the region. Military personnel will also be part of this body, remarked Seneviratne. However, the research institute only receives a budgetary allocation of Rs. 2.5 million to carry out its work.

Sri Lanka is considered to be the world’s ninth largest exporter of natural rubber. In 2011 the rubber industry grew 58.7 per cent, reaching US$ 884.8 million. In 2010 rubber earned only US$ 557.6 million, according to the Central Bank External Sector Performance Report.

Last year’s demand was mostly driven by China and India, which absorbed most of the global market as prices of synthetic rubber continued to increase due to high oil costs. The trends are expected to continue in 2012.

Related Info :

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Sri Lanka's Exports in December 2011 Went up 24pct to $ 906mn with Sharp Gains in Textiles & Rubber

24th February 2012, www.lankabusinessonline.com

Sri Lanka's exports in December 2011 went up 24 percent to 906 million US dollars from year ago with sharp gains in textiles and rubber products, the central bank said.

Imports during the month went up 34 percent to 1.9 billion dollars with spending on investment goods like transport equipment and building materials rising sharply, a statement said.

The trade gap during December 2011 widened 44 percent to just over a billion dollars.

"The expenditure on imports, although increased by 33.7 percent to 1,910 million US dollars in December 2011, decelerated from a year-on-year increase of 78 percent reported for November 2011," the central bank said.

"The expenditure on imports was driven by continuing demand for investment and intermediate goods.

"Government infrastructure projects financed mainly by foreign loans also raised the demand for investment goods."

The largest contribution to the export earnings in December 2011 came from industrial exports followed by agricultural exports.

Industrial exports increased by 28.9 percent to 703 million dollars in December 2011 compared to the same month of 2010.

"Among the industrial exports, textile and garments remained the major contributor and grew by 25.2 percent to 384 million US dollars followed by rubber products, food, beverages and tobacco and machinery and equipment."

The agricultural exports grew by 10.3 percent, year-on-year, in December 2011 mainly driven by tea and coconut exports.

"Earnings from tea exports grew by 10.5 percent and coconut exports recorded an impressive 97 percent growth in December 2011," the statement said.

"The rubber exports declined as the demand for rubber from domestic industries continued to remain elevated."

Total earnings from exports in the 2011 calendar year increased by 22.4 percent to 10,487 million US dollars compared with 2010.

The share of industrial exports in total exports stood at 76.4 percent in 2011.

Cumulative expenditure on imports during the 2011 year increased by 50.4 percent to 20,230 million US dollars.

The investment goods imports increased by 60.3 percent to 4,663 million US dollars with the bulk of the expenditure going on machinery and equipment, transport equipment and building materials.

Expenditure on petroleum imports increased by 53.4 percent to 4,630 million US dollars in 2011.

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Sri Lanka Expands Rubber Cultivation in the Face of Synthetic Rubber Price Increase

25th July 2011, www.island.lk, By Steve A Morrell

Natural rubber is facing a bright future with the price of petroleum based synthetic rubber increasing rapidly. Therefore Sri Lanka would expand its acreage under rubber by planting 5000 hectares in Monaragala, Plantation Industries Minister Mahinder Samarasinghe announced recently.

Addressing the 92nd Annual General Meeting of the Colombo Rubber Traders’ Association as the Chief Guest the Minister said it would increase to 10,000 hectares as the demand grew for natural rubber.

He said plantation trials were also being conducted by the Rubber Research Institute in the Jaffna district and other northern areas.

Minister Samarasinghe said the present estate management lease agreement would lapse in 35 years and he posed an open ended question; would it be that the plantations would revert to the people of this country or continue to be sustained in its present form ? He brought to bear the intensity of small holders who had contributed significantly circumventing all odds and they were significant partners in the progress of the sector.

Exports of value added products are now in the region of 63 million SLR, and growing with 2010 being a record year.

He said 1.5 billion SLR was cost of fertilizer for totality of rubber holdings. It was therefore imperative that simultaneous increase of production was essential if the rubber industry was to progress.

The subsidy was increased and plantation companies too were subsidized for use of panel guards to intensify increased production.

Colombo Rubber Traders’ Association Chairman M.S.Rahim said that Planters and Regional Plantation Companies had to be credited with high standards they maintained.

He said product standards plus their sustained production drive had sequentially resulted in Rubber being an important plantation crop which had proved its worth and its impact on the economy. Production had increased 12 %, but the small holder sector, of about 125,000 cultivators contributed substantially to boost production levels which were about 153, 000 tons annually.

Latex crepe contributed to natural rubber exports, but value added products gaining in exports had also contributed to plus factors to enhance importance of rubber contributing to export inventories surpassing all past records. Rahim said in summing up 2010 as a good year.

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Natural Rubber Fetches over Rs 600 a Kg at Sri Lanka's Colombo Rubber Auction

07th January 2011, www.island.lk

High demand from India and China has ensured high rubber prices despite the global recession and with domestic demand picking up, the price of rubber expanded beyond Rs. 600 this week.

Weather in most rubber planting countries have not been conducive for tapping operations through out and production came down drastically during 2010 due to continuous rains. Meanwhile, due to the recession in Europe and USA, many rubber based industries shifted their operations to India and China, Damitha Perera, Director,Forbes & Walker Commodity Brokers (Pvt) Ltd said in a statement.

"The internal demand in both China and in India too was on the rise. Demand for cars in Asia grew ever than before during 2009/2010.

Sri Lanka too has a domestic consumption of well over 60% of its production, currently being one of the leading suppliers of Dipped products (Latex Gloves) and Solid Tyres to the world. As a result of all these reasons the current Rubber prices have reached the all time high price levels," Perera said.

At the public Auction dated 6th January 2011, Latex Crepe Ix reached Rs.605 whilst the price range for Latex Crepe No.01 was quoted between Rs.580 to 600 with an average Price of Rs.588 per kilo. Sheet Rubber (RSS) No.1 is currently selling over 560/- per kilo.

This upward trend may continue for some time as per industry experts, Forbes & Walker Commodity Brokers (Pvt.) Ltd said.

Sri Lanka saw the highest price for rubber ever to be recorded at the Colombo Rubber Auction last Thursday (6) held at the Ceylon Chamber of Commerce. It was a significant milestone as the price for Latex Crepe 1X reached the Rs 600.00 per Kg mark for the first time ever.

Shehan Meegama of John Keells PLC was able to make history when he obtained Rs 605.00 for a Latex Crepe 1X, manufactured by Eladuwa Estate managed by Namunukula Plantations Ltd. It was bought by Almar Trading Co. (Pvt) Ltd, one of the largest exporters of Rubber in Sri Lanka, a statement said.

Related Info:
• Sri Lanka Rubber Export Earnings Up on Increasing Demand from Emerging Markets

DSI Group with University of Moratuwa Establishes R&D Unit for Rubber Products following PPP Incentives in Last Budget

23rd December, 2010, www.island.lk

DSI Samson Group recently signed an agreement, with University of Moratuwa and Uni-Consultancy Services to jointly establish a Research and Development unit for Rubber based Products and Process development. The event took place at the University of Moratuwa on 16th December 2010.

DSI Samson Group is a well established diversified Sri Lankan conglomerate and a leading manufacturer and exporter of rubber based products.

The company is aiming at developing its research facility base to compete successfully with the competitors in the international market.

"Government of Sri Lanka has given attractive incentives to the private sector to carry out Research & Development projects through recent budget proposals and we are very keen on getting the best out of the opportunity" said Kulathunga Rajapaksa, the managing director of DSI Samson Group.

He further added that rubber based product manufacturing industry contributes to approximately 5% of the total export revenue of Sri Lanka and the competitiveness of the industry can be improved through Public Private Partnership.

Steep increase in rubber prices during the current year has made the Sri Lankan rubber products highly un-competitive in the global market.

Research and development plays a vital role in maintaining the competitiveness of the local rubber products manufacturers in terms of cost reduction and quality improvement.

Sri Lanka Rubber Export Earnings Up on Increasing Demand from Emerging Markets

08th September 2010, www.dailynews.lk, By Indunil Hewage

Rubber prices in the world market have risen due to the rubber producers’ inability to supply products to the world market in the face of escalating demand for rubber products from emerging markets in Asia and other countries.

Rubber Development Department Director General R.B. Premadasa said the growing demand from the Indian tyre market for rubber products and super economic powers recovering from the financial crisis in the world have been identified as the main reasons for high demand for rubber in the world.

The country’s rubber export earnings have shown an increase in the first half in 2010 when compared to corresponding period in 2009 due to escalating rubber prices in the world market.

However, total rubber export volume has dropped slightly in the first half in 2010 in comparison to the same period in 2009.

Total natural rubber export earnings was Rs 9,554.89 million during the first six months in 2010 and it was Rs 5,262.86 million during the first half in 2009.

Total rubber production in the country was 75 million kgs in the first half in 2010 and it was 69 million kgs in the corresponding period in 2009.

Total Rubber exports during the fist half in 2009 was 31,022,689 kgs and total rubber export during the first half in 2010 recorded 28,007,385 kgs showing a decline in the export volumes.

Prices of sheet rubber and crepe rubber are recording around Rs 350 and Rs 450 per kgs respectively in the local market at present.

Total sheet rubber export for the first six months in 2010 was 11,464,710 kgs and it was 13,890,487 kgs during the corresponding period in 2009.

Total export volume of sole crepe, scrape crepe and latex crepe recorded 733,634 kgs, 37,000 kgs and 9,593,600 kgs respectively during first six months in 2010.

Total export volume of sole crepe, scrape crepe and latex crepe were 1,114,632 kgs, 211,000 kgs and 5,197,752 kgs respectively during the first half in 2009.

TSR and Latex and other products exports recorded 1,532,690 kgs and 4,645,751 kgs respectively during the first six months in 2010.

Total export volume of TSR and Latex and other products were 4,003,580 kgs and 6,605,238 kgs respectively during the corresponding period in 2009.

Sri Lanka's Increases Rubber Production by 6pct

19th July 2010, www.dailynews.lk, By Gayan Kanchana

Sri Lanka’s annual rubber production has increased by six percent to reach 137 million kilograms. It is expected to grow further with new rubber plantations this year. The annual production increased by six percent to reach 137 million kilograms, and is expected to increase as new plantation bearing comes in the Moneragala district.

A further two thousand hectares are expected to come into bearing this year, Colombo Rubber Trader’s Association (CRTA) Chairman M.S. Rahim said.

The Rubber Development Department will shortly be holding a census of rubber land in the country.

Rahim speaking at the 91st Annual General Meeting (AGM) of the CRTA which was held in Colombo last week said: “Last year due to the worldwide recession most of the world economies collapsed. But thanks to the rigid financial controls, several Asian

countries were able to manage in economies well”.

China was the first to lead extensive development in their country and soon followed by India. With the two larger populations at work, all raw material rebounded. With such a rapid development, the demand for rubber for automobile tyres, highways and building construction increased.

From January 2009 local rubber prices moved up steadily and reached level of Rs 310 for crepe 1X and Rs 318.50 for RSSI by the end of the year. This was the best of times for the growers as it was the cropping month and was a bonus for the plantation companies who had to bear an increase in labour wages in 2009.

But the good time began to end for our rubber growers after March 2010 due to bad weather and excessive holidays. Growers have not been able to produce estimated crops and enjoy the true benefit of the higher than ever prices fetched at the auction.

“Rubber products are an important component of the manufacturing sector because its potential is continuing with the demand of world natural rubber product. We are among the ten ranking rubber exporters in the world,” Rahim said.

Chief Guest at the AGM Bank of Ceylon Chairman Dr. Gamini Wickremasingha said, ‘The GDP posted a growth in the country by 7.1 percent for the first quarter of 2010 compared to that of the corresponding period of the last year. The rupee went up by 2.6 percent against the US dollar.

Exports have recorded a growth by 7.1 percent for the first three months of 2010 compared with the same period of the last year with higher earnings from the industrial exports including rubber products.

Sri Lanka's Malwatte Valley Gets Record Price for Rubber

24th April 2010, www.dailynews.lk

Malwatte Valley Plantation obtained a record price over Rs 450 per kg for its Centrifuged Rubber Latex manufactured at their Vincit estate in Avissawella.
The company has now sold its entire production of rubber until the end of its first half financial year ending June 2010 at today's boom prices.

Company Managing Director W.L. Bogtstra said such forward sales were done to insure the profit of this sector arising out of these lucrative prices to end June 2010.

Tea prices though slightly lower recently have resulted in favourable profits so far this year. With increased crops earnings and brought leaf operations the financial prospects of the company are encouraging.

Rubber Prices Reach an All Time High at the Auction

30th March 2010, www.dailynews.lk

A kilogram of rubber fetched Rs 363.25 at the auction. Sri Lanka is the main exporter of rubber to many countries including China and India. They are the biggest manufacturers of tyres in the region.

There has been less rubber production as many of the countries faced a dry weather.

Even the largest rubber producer in the region, Thailand is also affected due to the prevailing dry weather, Colombo Rubber Traders Association Chairman M.S. Rahim said.

'Due to the dry weather, production dropped drastically.

There will be a drop in demand in the future if this weather continues. Most of the rubber manufacturing countries have faced the same situation, Rahim said.

He said last year out of the total rubber production in the country, over 60 percent was used for the local industry. The industry expands to a land extent of 122,000 hectares in the country.

The total exports of natural rubber in the country amounted to 55,990 metric tons last year.

Sri Lanka exports only white crepe rubber which has a good demand in the world market.