*A debacle hits Rubber industry
Last Friday the unthinkable happened. At the weekly Rubber auctions there was not a single kilo of rubber sold. Shocking information routed to us through the Planters’ Association said this phenomenon had never in the history of Rubber occurred before. Chairman Planters’ Association of Ceylon Dhammitha Perera (GDV) said this was the very first time such shocks had ever occurred in the rubber industry. That there was no sale of Rubber at the weekly Rubber auctions. He said the previous week prices realised were at all time low of approximately Rs. 125. per kilo. (Within context of current prices)

However last week there were bids of Rs.100. per kilo which he said was totally unacceptable. Hence producers were not prepared to sell at this low price.

Wide ranging repercussions stemming from this price disaster would in the short term affect small holders.

Rubber was among plantation crops that earned valuable forex. That was about ten years ago. There after approximately 70 % production was absorbed locally and quantity exported was about 30 %. Irrespective of this market imbalance rubber gradually emerged as a profitable crop.

Rubber producers did enjoy good returns over the past six years. At best of times ther industry here had to depend on given war situations or the benevolence of bilateral trade. The 2nd World war gave the rubber industry here boom time, so too the Korean War. Bilateral trade with China gave rubber much needed boost. The Rice pact of rice for rubber began in 1953.

Since then rubber plantations were existing on surface survival barely able to make ends meet. That was till local entrepreneurs emerged.

The finance crunch has now affected Rubber as well because companies who bought at the auctions had over the past three months reduced their buying quantities because of draconian lending options offered by banks.

As much as tea was affected dictated by international market trends, so too Rubber, although consumers were mainly local consumers.

Perera further said there was confusion caused by relief measures offered by the government. Applicable guide lines were not clear and open to varied interpretations causing complete chaos in the market.