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Rubber price recovery delayed, says top Sri Lankan producer

Jul 14, 2015 13:24 PM GMT+0530 | 1 Comment(s)

EconomyNext – Rubber prices are likely to remain low despite expectations of a recovery this year given slow global demand in and surplus stocks with the collapse in crude oil prices, according to Sri Lanka’s biggest producer.

Kegalle Plantations said its rubber production fell 12 percent to 3,534 metric tons in 2014 from the year before and that it accounts for about four percent of the island’s production.

The company’s chairman Sena Yaddehige said this year is expected to be a “challenging” year with forecasts that tea prices will further decline and rubber prices will continue to remain weak due to the “sluggish demand” in the world market.

“We are anticipating a surplus rubber stock with the reduced oil prices,” he has told shareholders in the company’s annual report.

Producers are under pressure owing to lower global demand for natural rubber accompanied by economic downturn and large stockpiles accumulated in major buying countries like China, Japan and Europe.

Lower oil prices have also encouraged a shift to synthetic rubber use, Kegalle Plantations said.

“The declining trend in the global rubber market is expected to be continued to the next period due to large stockpiles accumulated in major buying countries although their expectations were to recover within 2015,” it said.

“Weakening crude oil prices prompted the demand for synthetic rubber placing further downward pressure on natural rubber prices.”

(Colombo/July 14, 2015)
 


 

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1 Comments

  1. Tilak July 14, 01:42 AM

    Points to ponder. a.In comparision with 2013 during 2014 SL has imported into the country more than 15n kg of rubber for the industry in order to cover raw runber shortage within the country.b.Extrpolate the rubber imports for 2015 in to the country SL may head for a historicle record.c.It is not only the weather but lower prices leading to losses marginalised particularly the small holder.d.Has export prices of finished products fallen from the days of 600 a k.g to 200 ak.g. for raw rubbere.Higher value of LKR too is helpful in encuraging increased immports whilst local production contracts.EU,Japan ,ect is exporting deflation with record low currancy values.f.In this context the govenment action of compensating small holder based on a volumequality based method is clearlyh correct commendable move.

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