What ails Sri Lanka’s rubber industry?
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Simply put: Lack of focus by the authorities over several decades, price escalations, trees growing old and step-motherly treatment for a plantation crop that was considered to be gold more than 70 years ago. This is also the 150th anniversary of rubber being planted in Ceylon (now Sri Lanka). But where are the celebrations of a historic event of a product that has helped the country in earning valuable foreign exchange?
Consider this: On December 18, 1952, the Ceylon–China Trade Agreement, commonly known as the Rubber-Rice Pact – a barter deal, was signed. It was an agreement reached after both countries faced economic challenges and shortages.
It is reported that Ceylon was experiencing a rice shortage, while struggling to sell its natural rubber. China on the other hand needed rubber for industrial purposes. Under the terms of the deal, Ceylon agreed to export 50,000 metric tonnes-MT (50 million kg) of rubber annually to China, while China promised to supply 270,000 MT of rice each year. The agreement was designed to last for five years.
In 1960, Ceylon exported 107,000 MT (107 million kg) which means the country had sizable local production. Today, production has dropped to 69,200 MT (69 million kg) from 98,600 MT (98 million kg) during 2014 to 2024.
The bulk of raw rubber required for the country’s burgeoning value-added rubber industry is imported from a variety of countries, which should never have happened if the country grew its production and growing space. Ironically Sri Lanka is the main manufacturer of the best quality latex crepe rubber in the world and also the largest exporter of latex crepe to the global market. Among its achievements are that Sri Lanka is the largest exporter of industrial solid tyres and the fifth largest exporter of latex gloves to the world.
Plaudits no doubt, but why is the industry, unlike tea, getting the recognition it deserves? My interest in this issue was piqued by an article by a well-known personality in the industry.
Asking why policymakers neglected this plantation sector, Emeritus Professor Asoka Nugawela, former Director, Rubber Research Institute of Sri Lanka, said that in the major rubber growing plantation companies in the country, the productivity levels achieved has declined by around 50 per cent in 2025. For example, in three plantation groups, each group consisting of around 1,000 hectares (ha) of mature rubber, the yield levels have dropped to 608 kg per ha, 644 and 659 per annum in 2025 from 1,363, 1380 and 1,235 recorded in 2020 respectively.
Further, this drastic decline in land productivity is in the background of escalating costs, i.e. worker wages and agro-chemicals, with no corresponding increases in selling prices. This scenario in the rubber plantation sector will significantly lower the revenue generated whilst increasing the expenditure leading to unhealthy cash flows and low investments in the sector, he warned.
He said 2026 marks a century and a half of years since the first rubber seedlings were introduced to the country. It is from Sri Lanka that the natural rubber cultivations had spread to the present-day giants of the industry in the Asian region. From commencement, the natural rubber industry in Sri Lanka has played a key role in the economic development of the country, employment generation and mitigating impacts of climate change.
Between 2014 and 2024, the land extent under rubber has also come down from 133,000 to 84,000 ha (207,568 acres). The extent under production in 1960 was 668,213 acres, he said.
“Accordingly, natural rubber production and land extent of the country have shown a negative growth of 2.98 per cent and 3.68 per cent per annum respectively, during this 10-year period. If this trend is allowed to continue, an industry that had earned more than US$1 billion per annum in foreign exchange whilst supporting the livelihood of thousands of families and servicing our natural environment may get eliminated,” he warned.
Pausing my column, I walked to the kitchen to get my second mug of tea and a piping hot ‘maalu paan’ (Aldoris, the choon-paan karaya, had come to the neighbourhood). At the same time, the trio was conversing under the margosa tree on a totally unrelated (to the column) subject.
“Aei vishala prashnayak thiyenney avurudu walata rathinggha paththu karana eka gana. Janathawa kae gahanawa eh saddey ballanta saha puusanta balapawa kiyala (Why is there a big issue over the lighting of fireworks for the Avurudu? There are complaints that the noise affected dogs and cats),” said Kussi Amma Sera. “Hari amuthui, mokada mae prashney gana whena avuruduwala mechchara katha karey nae (Quite strange as these complaints didn’t come in previous years),” noted Mabel Rasthiyadu. “Den janathawa wadath denuwath athi puusanta saha ballanta naraka lesa salakaema gena (Maybe people are more conscious about ill-treating cats and dogs these days),” added Serapina.
Meanwhile, in a bid to better understand the crisis facing the rubber industry, I reached out to Harin de Silva, Chairman – Colombo Rubber Traders’ Association.
“There are many problems. There is a lack of focus and attention by policymakers and government agencies. There is no replanting, trees are old and as a result susceptible to various diseases and fungus. Rubber has got step-motherly treatment from the government – not attractive as in the case of tea, and plantations consider cinnamon and palm oil as bringing in better returns,” he said, adding: “While tea gets VAT refunds, it takes a long time for rubber. The tea industry gets immediate access to policymakers including ministers but for us to get an appointment, it may take 10 or 15 calls plus influence. There is a disproportionate level of support for this sector.”
Ironically, rubber was introduced to Thailand, now the largest raw rubber producer, from Sri Lanka. Thailand produced approximately 4.85 million MT in 2024, accounting for about 36 per cent of global rubber production, compared to a paltry 69,000 MT in Sri Lanka.
Concluding my column, I was conscious that the media (including myself) may also be guilty of not drawing attention to the rubber crisis as tea is a more ‘sexy’ topic among plantation crops. Let’s hope these thoughts will be an eye-opener and draw the attention of the policymakers.
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