Stretching rubber
View(s):
I woke up early this Thursday morning (December 30) with a splitting headache and wondered whether the New Year (two days away – January 1) would also be filled with ‘headaches’ as the country lurched from one crisis to another.While contemplating my topic of discussion for the day, as if on cue, the phone rang. It was Karapincha Perera, the tea-kade gossip, not the right person to recommend a topic. However, in this context, he turned out to be refreshingly enlightening.
“Hello…..I saw an interesting article in the newspapers the other day. It was about the rubber industry and how we have increased our export of rubber,” he said, after my warm greeting.
“Rubber is one sector we need to harness, as its potential is enormous and value-addition products instead of raw rubber exports are the way forward,” I said.
“But I am hearing that production is down. I wonder why,” he asked.
“Well that’s due to many reasons – disease, lower yields and the need to shift to better yielding varieties of rubber plants,” I said.
Tea and rubber were once the country’s top exports which have now given way to foreign earnings from migrant workers, garments and tourism (earning US$4 billion in 2018).
However, the rubber industry is facing many challenges – a debilitating leaf disease, a need to plant high-yielding clones; a drop in production earlier this year due to lower prices, lower yields per hectare; and a shortage of chemical fertiliser.
Before I could proceed further, I was drawn to the conversation under the margosa tree – the last for this year – by the trio. It sounded interesting.
“Mata aranchiei than superrmarket-wala, dara wikunanawa kiyala. Mona thathvayakda mey rate (I was told that now supermarkets are also selling firewood. What a situation in this country),” said Kussi Amma Sera.
“Arbudaya naraka athin wadath naraka athata gihin. Gas ne, boomithel walata polim thiyenawa. Janathawa duk vindinawa. Naayakayo hondata innawa, nivaduwata pita rata yamin (The crisis has gone from bad to worse. There is no gas and there are queues for kerosene. The people are suffering while the leaders are having a good time going on holiday abroad),” noted Serapina.
“Mata wishwasai meita wedi loku prashna ethiwewi kiyala 2022 (I am sure we would have bigger problems in 2022),” added Mabel Rasthiyadu.
I sipped my tea and got back to the subject at hand – rubber. Recently, the Export Development Board said that Sri Lanka’s rubber exports (raw rubber and products) for the period up to November 2021 were $1 billion and heading for $1.1 billion by the end of the year, its highest ever.
In 2020, Sri Lanka earned $786 million from rubber-based products and out of that $425 million came from tyre-related products. The target for rubber exports is $3 billion by 2025 and it can be Sri Lanka’s saviour if we get our act together and develop this sector.
While it is fetching attractive prices currently at Rs. 700 per kg this week compared to Rs. 450 per kg in January 2021, the sector is facing many challenges.
For example, the leaf disease Pestalotiopsis which causes the leaf to fall has ravaged 40,000 hectares of rubber this year, up from 20,000 hectares in 2020 and 10,000 hectares in 2019 when the fungus first emerged.
Industry officials say the authorities have failed to address this issue and additionally the unavailability of fertiliser is aggravating the problem and posing long term repercussions. There is no chemical to spray the trees against this fungus. The few chemicals that are available in the market are costly; one chemical which cost Rs. 6,000 earlier is now trading at Rs. 13,600.
Yields are also low at less than 1,200 kg per hectare, compared to over 2,000 kg in countries like Malaysia.
Rubber prices have gone up to their highest level in Sri Lanka, a boon to growers largely due to rising demand in the global market and a shortage of supply in Sri Lanka. The COVID-19 pandemic has led to an exponential rise in rubber products particularly for medical rubber gloves for example, with companies like Dipped Products, one of the world’s biggest producers of medical gloves, doing well in the past two years.
On the negative side, due to the high prices, smallholders are resorting to over-tapping which has long term implications.
According to official data, Sri Lanka’s rubber production in 2020 was 78,206 metric tonnes (MT), while production in 2021 would touch these levels or be lower. Production has been coming down rapidly over the years, from 135,000 MT five years ago.
Sri Lanka is also one of the leading crepe rubber-producing countries in the world but its production is woefully inadequate to meet the demand of rubber-products manufacturers and has resulted in imports of rubber to meet the demand. Imports have also been affected by the shortage of dollars in the market, while rising shipping costs have exacerbated these issues.
Another positive, according to official data, is that Sri Lanka has a 30 per cent share of the global solid tyre market and more than 10 internationally renowned companies manufacture and export products under international brand names.
Data show that there are more than 100 rubber and rubber-based export companies in Sri Lanka and about 50,000 workers are employed in these firms, while the rubber industry – as a whole – provides livelihoods to about 300,000 people via direct and indirect jobs.
Experts have persistently pointed out the weaknesses in the rubber bureaucracy and its inability to help the growth of the sector. Sri Lanka was once in fourth place in the world as a natural rubber producer in the late 1960s but has since then dropped to 12th position behind countries like Vietnam, Cambodia and Myanmar which developed the sector, long after Sri Lanka.
Ironically, according to Dr. L.M.K. Tillekeratne, former Executive Director, Rubber Research Institute, the rubber industry in Cambodia and Myanmar was developed with expert assistance given by Sri Lankan scientists.
“With that technical support, they were able to increase their rubber production three to four fold within a matter of six years. During this period, the productivity of rubber lands in Sri Lanka dropped to 829 kg/Ha/Yr from 1300 Kg/Ha/Yr produced a few years ago,” he said.
The 2022 budget restricts the import of rubber-based products and encourages the reduction of raw rubber exports – to provide this rubber to local industries, which are faced with a shortage of raw material. Whether this would work in increasing rubber-based exports remains to be seen.
As I sipped the second mug of tea brought by Kussi Amma Sera and scanned the ‘depressing’ headlines of the morning newspapers which were about queues, shortages and crises, I wondered whether 2022 would also be a year of ‘depressing’ headlines and mounting crises!
Hitad.lk has you covered with quality used or brand new cars for sale that are budget friendly yet reliable! Now is the time to sell your old ride for something more attractive to today's modern automotive market demands. Browse through our selection of affordable options now on Hitad.lk before deciding on what will work best for you!