Natural rubber stocks on sale were “withdrawn” from the auctions a fortnight ago due to low prices and last week too, traders said, only low grade stocks were sold.
“Some rubber was sold last week but these were mainly low grades,” said a representative from the Colombo Rubber Trader’s Association.
According to the rubber traders, prices offered even last week, were below the guaranteed price of Rs 150 per kg.
The traders say the low prices are due to the global recession and that all commodity prices, including prices of natural rubber, have crashed. In a press release a fortnight back the Planters’ Association, on the other hand, said that rubber stocks were not sold because buyers were not willing to absorb a Rs 20 subsidy for producers, although the government has agreed to reimburse them. Instead, buyers have reduced their prices.
“The total quantity at that rubber auction was withdrawn as buyers were not agreeable to absorbing the Rs. 20 subsidy offered by the government to the producers. The government is to reimburse the buyer who has to pay the subsidy at the point of purchase. As a result, the buyers had made a collective decision to discount the price per kg to Rs. 100 compared to the previous week’s Rs. 125, although the world market prices showed an increase,” it said.
Two weeks back according the Planters’ Association statement “buyers reverted to offering Rs 125 per kg,” but this is still below the guaranteed price of Rs 150 per kg stipulated by the government. Rubber traders have already met officials at the Ministry of Plantation Industries to solve the problem. Meanwhile, rubber producers are asking the government for a 6% subsidy on interest for loans for one month’s working capital, and a moratorium on loans to develop rubber factories.