Struggling rubber industry sees no respite
The fate of Sri Lanka’s once robust rubber industry remains bleak in the short to medium term as it continues to face a number of challenges from several fronts.
The dampened global rubber prices, largely due to lower oil prices, have made the growers and tappers shifting to various other crops and livelihoods while the lack of government support has left little room for the industry to rebound unless the international prices pick up.
According to an industry report shared with Mirror Business by a senior member of the rubber trade, who preferred anonymity, the grim outlook will continue to prevail unless the structured efforts are made to rectify the key industry issues. The latest statistics showed the prices for all grades of rubber continued to drop due to supply gluts in most of the natural rubber-producing countries. However, in contrast, Sri Lanka’s rubber output continues to slump.
Sri Lanka witnessed a steep drop in output in 2016/2017, where the yields fell by 9,600 tonnes to 79,000 tonnes.
The RSS grade production dropped by 4,700 tonnes, mainly produced by the smallholders, who saw “no signs of improvement”, according to the senior official.
The main reasons behind the lower output are the use of rubber cultivated land for development purposes and the growing shift towards oil palm cultivation.
Although this shift could threaten the rubber industry, Planters’ Association and Colombo Rubber Traders’ Association Chairman Sunil Poholiyadde is of the view that diversification would help the smallholders, who are really struggling.
“It makes economic sense to have both, rubber and oil palm. The issue is when the prices are high, tapping takes place and when the prices dip it doesn’t happen. That is the local situation. With there being some certainty around oil palm, the planters are exploring this option. It makes total economic sense,” opined Poholiyadde.
When questioned if oil palm will eventually replace rubber, he assured a complete replacement cannot take place as only 20 percent of land in Sri Lanka is suitable for oil palm.
“There is no question of oil palm completely disrupting rubber plantations as only a small proportion of land can be used for this purpose. To move the rubber industry towards a positive trajectory, required are structured methodologies to boost production and encourage planting,” he stressed.