* Urges removal of export cess of Rs. 15 per kilogram and granting relief to exporters
* Says continual price declines a major concern
* Adverse weather conditions in 2014 halt total production at 98,570 tonnes
By Charumini de Silva
The Colombo Rubber Traders Association (CRTA) called on the Government to re-evaluate industry policies in the wake of reduced production and weak international demand.
CRTA Chairman M.S. Rahim said the export cess of Rs. 15 per kilogram levied by the Government had largely contributed to making export prices to niche world markets unattractive, leading to a decline in exports of thick pale crepe, scrap crepe, sole crepe and TSR.
Pointing out that Sri Lanka was the only producer of these grades, Rahim urged the Government to remove the cess and grant relief to exporters when world markets were facing difficulties due to slow demand.
Rahim made these remarks while addressing the 96th Annual General Meeting of CRTA in Colombo recently.
He went on to say that as recognised premium grades of rubber, these were not consumed by local rubber product manufactures as input in their products. He added that the imposition of export cess on these grades had not reached its objective of encouraging increased consumption in value-added products for export.
In view of the drastic decline in prices, a guaranteed price of Rs. 300 per kilogram for all grades of RSS was offered to rubber smallholders from 15 November 2014 to January 2015 via a scheme implemented by Rubber Development Department (RDD).
However, with the Government change in January 2015 they decided to pay a guaranteed price and introduced a scheme to support the smallholders that produce bulk of RSS rubber. It was granted Rs. 350 for RSS1, Rs. 325 for RSS 2/3 and Rs. 300 for RSS 4/5.
Rahim explained that the new guaranteed price greatly benefited smallholders.
“As smallholders produce the majority of RSS 3, 4 and 5 they can receive the subsidy based on the difference in price achieved at local auctions held at the Ceylon Chamber of Commerce (CCC). Thereby, they achieve a maximum price of Rs. 300, which will be most profitable and well above world market prices,” he added.
Pointing out that this new scheme had created inequality in the industry he said: “Unfortunately, plantation companies and large estate owners were exempted from this subsidy; despite the fact that they produced good quality RSS 1, 2 and 3.”
Due to the adverse weather conditions that prevailed during 2014, there was a drastic drop in production. The year ended with a total production of 98,570 tonnes.
Commenting on the price declines, he said: “At the beginning of January 2014 latex crepe no.1X obtained Rs. 410, while RSS1 fetched Rs. 345 per kilogram. However, by the end of January prices dropped sharply to Rs. 310 for latex crepe no.1X and Rs. 278 for RSS 1. Thereafter, prices continued to drop further to Rs. 295 for latex crepe no.1X while RSS 1 dropped to its lowest Rs. 250 at the end of 2014.”
Sri Lanka to host Global Rubber Conference in October
By Malik Gunatilleke
Sri Lanka is on its way to making the rubber industry a $ 3 billion sector, Minister of Industry and Commerce Rishad Bathiudeen stated following the announcement that the 4th Global Rubber Conference (GRC) and Exhibition will be held in Colombo from 27 to 30 October.
The GRC, formerly held as the Asean Rubber Conference until 2010, has been held in Cambodia (2011), Vietnam (2012) and Indonesia (2013) so far, while Sri Lanka will be hosting it for the first time with over 700 trade visitors and 28 countries set to participate.
The event, co-organised by the Sri Lanka Export Development Board and Confexhub, will be themed ‘Sowing the Seeds of Sustainable Future’. The Ministry of Plantation Industries and the Ministry of Industry and Commerce have extended their support for the event as well.
“We are now aiming at an ambitious $3B rubber industry in the coming decade. To arrive at this $3B in a viable manner, it is essential for us to support the rubber industry including growers. I believe it is time for a long term development plan for this sector,” said Minister Bathiudeen, speaking at the launch of GRC in Colombo on Thursday.
“There are several important socio-economic reasons to strengthen this industry. It is time for a long-term development plan for the rubber sector,” he stated.
In that context he said that hosting the GRC will be a great opportunity for Sri Lanka to take the sector to the next level, providing local stakeholders a chance to network with their international counterparts.
In 2013, Sri Lanka earned $ 72 million in rubber exports as well as $ 887 in rubber finished products. The total earnings of $ 960 million was a 100% increase in earnings from 2009, the Minister added.
Sri Lanka is currently the sixth largest exporter and the eighth largest natural rubber producing country in the world while the Government has set in place a 10-year plan to develop the sector.
Meanwhile, the Ministry of Industry and Commerce also announced the implementation of two projects including the first ever rubber industry database as well as a national rubber research consensus at a cost of more than $ 46,000.
Commenting on the current situation regarding the rubber sector in Sri Lanka, Export Development Board (EDB) Chairman and Chief Executive Bandula Egodage explained that the rubber industry was separated into the plantation services, pertaining to raw rubber production, and the rubber product manufacturing services.
He stated that the EDB has initiated several projects to improve the industry while it encouraged value addition as opposed to raw exports.
“We do not intend to curtail raw rubber production in Sri Lanka, but as part of our export vision, we are looking to add value to our exports. That is our mandate and direction,” he said.
Egodage highlighted the importance of networking, awareness, investment and global recognition which is where hosting the GRC in Sri Lanka would benefit local stakeholders.
The GRC will bring together stakeholders from the US, Europe, East Asia, North Asia and ASEAN countries to discuss issues concerning the global NR situation, strategies and challenges for sustainability, enhancing quality and several other issues.
The International Rubber Research and Development Board Secretary General Dr. Abdul Aziz urged all rubber players, policy makers, industry experts, producers and manufacturers to make use of this opportunity to discuss strategies aimed at expanding the rubber industry for global sustainable growth.
He explained that current global rubber prices are not conducive but predicted that they would recover. The GRC will help participants discuss the challenges that lie ahead as well as new material and strategies to improve value addition.
According to Dr. Aziz, over 50,000 products are made from rubber and around 70% of rubber production goes into the tyre industry.
He shared his optimism regarding the future of the global sector, revealing current initiatives that focus on working with different species of rubber trees.
“We are currently only working with one species (Hevea brasiliensis) but there are nine recorded species of trees. Projects are under way to head into the Amazon jungle in Peru to collect these other species,” he said.
Confexhub CEO and Director of the Organising Committee of the GRC, Paul Yeo briefed the gathering on the itinerary for the four-day event, underlining its key speakers and segments.
“The conference will feature speakers from 12 countries, 20 paper presentations by the cream of the rubber industry covering topics under six special-focused areas and a forum discussing venturing into new planting areas in non-NR producing countries,” he said.
The conference will also include a pre-conference study tour of the Sri Lanka Rubber Research Institute as well as a post-conference half-day tour to the only rubber auction in the world, which is administered and managed by the Colombo Rubber Trader Association.
Source : ft.lk
August 30, 2014 (LBO) –Sri Lanka inflation continued its decelerating trend observed since June 2013 and reached 4.5 per cent in August 2014 compared to 4.7 per cent in July 2014, on an annual average basis the Central bank of Sri Lanka said in a media release.
The data is based on the change in the Colombo Consumers’ Price Index (CCPI) (2006/07=100), which is computed by the Department of Census and Statistics.The year-on-year inflation also decreased to 3.5 percent in August 2014 from 3.6 per cent in the previous month, as a result of decrease in price of food items, especially of vegetables the bank said.
The decline in prices of items in the Food and Non-alcoholic beverages sub-category was the main contributor to the monthly decrease contributing 0.5 per cent in the CCPI in August 2014.
Within the Food category, average prices of almost all the varieties of vegetables, green chilies, potatoes, red onions and some varieties of fish decreased compared to the previous month due to the seasonal factors.
Meanwhile, prices of rice, fruits and eggs increased during the month.
Within the Non-food category, prices of items in the sub group of Clothing and Footwear, Communication, Recreation and Culture and Miscellaneous Goods and Services increased.
Prices in all the other sub groups, namely, Housing, Water, Electricity, Gas and other Fuels, Furnishing, Household Equipment and Routine Household Maintenance, Health, Transport and Education almost remained unchanged during the month compared to the previous month.
Core inflation, which indicates the underlying inflation in the economy, increased marginally in August 2014, over the previous month the bank said.
Accordingly, core inflation, on a YoY and annual average basis, increased to 3.9 percent and 3.2 percent, respectively, in August 2014 from 3.7 percent and 3.1 percent, respectively, in July 2014.