The highest ever rubber in Sri Lanka’s plantation history was recorded yesterday with RSS No. 1 going at Rs. 200 per kilo gram.

Forbes and Walker Commodity Brokers (Pvt.) Ltd. reported the sale of Kg 1,417 of Hiriwinna Estate at this price. The Crepe 1X grade too reached the highest price of Rs. 198 per Kg at yesterday’s auctions.

Former Chairman of the Colombo Rubber Traders’ Association (CRTA) Amanda Weerasinghe told The Daily Island Financial Review that natural rubber prices are likely to move up further.

"The gap between production and consumption will widen in the days to come. This is the main reason for this continuously increasing demand. According to forecasts by the China Rubber Association, rubber consumption of China this year will increase by 6% to 3.5 million tons, in which 1.5 million tons are natural and 2 million tons are synthetic, due to quick development of automobile industry. Tyre output of China will rise sharply in the next 10 years and represent 8% of the world production. Potential of China’s automobile industry will ensure development of its tyre industry," he said.

According to industry sources the world requires 12-13 million tonnes of natural rubber to meet the demand but the production is around 10-10.5 million tonnes.

"Consumption growth will be fuelled by strong demand for tyres in China and India. This trend would keep natural rubber prices at a higher level. This is the right time that we need to encourage our rubber growers in concentrating more in better yields. With the current trend in increasing oil prices the synthetic rubber prices will further go up creating a better market place for natural rubber," he added.

According to the Central Bank of Sri Lanka rubber production increased by 3 per cent to 95 million kilo grams in 2004 in response to higher prices. The increase in crude oil prices resulted in higher synthetic rubber prices in the international market with a corresponding increase in natural rubber prices.