The Colombo Rubber Traders’ Association says there was no “collusion” on the part of buyers to offer prices below the government designated minimum price of Rs 150, per kg of natural rubber, at rubber auctions.
Responding to an article on the Sunday Times FT on February 22, the Association said in a letter to The Sunday Times FT that buyer decisions were individual and collusion did not feature into the equation.
It was refering to a extracts of a statement from the Planters’ Association of Ceylon on February 12 that were published. The Planters’ Association said, “The total quantity at last week’s rubber auction was withdrawn as buyers were not agreeable to absorbing the Rs. 20 subsidy offered by the Government to the producers.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.”
However, the rubber traders said in their letter “… we take strong exception to the statement “..the buyers had made a collective decision to discount the price per kg to Rs. 100.” The rubber traders went on to say; “With the economic downturn and crash in oil prices the cost of synthetic rubber has registered a sharp decline. This has had a negative impact on the prices of natural rubber export transactions on which have virtually ceased, placing manufactures and exporters in a dire situation.
In such a circumstance to expect the parties concerned to advance Rs 20 per kg with indefinite prospects of reimbursement would be an intolerable burden for them to bear. Thus the individual decision of each buyer was entirely and logically reactive, with collusion not featuring in the equation whatsoever.” |
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