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    Impact of declining Rubber production to the economy

    December 07, 2019

    Natural rubber production in Sri Lanka is declining at an alarming rate from 155000 Mt produced in 1967 to 82600 Mt last year. Sri Lanka with over 140 years history as the pioneer rubber grower in the world outside South America, was in the fourth place in the world as a NR producer in late nineteen sixties has already fallen down to the 12th position, overtaken by countries entered into growing rubber much later, such as Vietnam, Cambodia and Myanmar. Rubber industry in Cambodia and Myanmar was developed with the expert assistance given by Sri Lankan scientists. With that technical support they were able to increase their rubber production by three to four times within 6 years. During this half a decade, the productivity of rubber lands in Sri Lanka has dropped down to 774 kg/Ha/ Yr while the same in Cambodia has risen from 450 Kg/Ha/Yr to 1090 kg/Ha/ yr.

    At present, the contribution from the rubber industry to the total export value of Sri Lanka is only 5% of which, Rs 4.8 billion comes from the export of raw rubber particularly in the form of Latex crepe rubber. Income from rubber finished product export is US $ 864.4 Million (Rs. 152 Billion).

    About 70% of the total rubber and latex production of the country is converted to value added products like solid tyres, foam rubber, surgical, examination and industrial gloves and also for making solid and pneumatic tyres and tubes, rubber floorings, toys etc. Last year, 135,000 Mt of raw rubber and latex have been consumed by the local products industry while the total production of raw rubber in the country was only 82600 Mt. Hence, over 76,000 Mt of both dry rubber and latex have been imported to meet the shortfall in 2018. It is best for the economy of Sri Lanka, if this upward trend in rubber consumption for value addition is continued. But, the danger is that already, the rubber products industry will have to depend largely on the raw rubber supplies from other Asian countries. How long can we rely on these supplies?

    Hence, the time has now come for the RPCC to consider converting their estate latex used for the manufacture of latex crepe to good grades of RSS at a lesser cost, but selling at almost at the price of best quality latex crepe to meet the shortfall of RSS for local industries.

    One of the major reasons for the drop in productivity of all agricultural crops in the country is the escalating labour wages, which makes the weeding cost very high, particularly after the banning of the use of the weedicide Glyphosate citing health reasons which is an unfounded fear created by fear-mongers. As a result, farmlands are not properly weeded now to minimize the absorption, by weeds, of limited quantities of nutrients, added to the soil as fertilizers, at a very high cost. If this ban is not lifted after a proper review of the health hazards, productivity of all crops including paddy will drop further in the future. However, despite this ban, solid Glyphosate is available anywhere in the country at a very high cost. But, during the past couple of years, urea and MOP fertilizers were very scarce all over the country at the correct time to apply.

    Asian countries

    At present, over 75% of the total rubber production in the world is consumed in Asian countries converting into end products as the rubber industry has now almost totally shifted from the developed Europe and USA to the developing Asia. The world’s largest consumer of NR today is China, consuming over six times the consumption of rubber by the USA. All the reputed makes of US, and European tyres are made under license in China, Thailand and Malaysia and exported all over the world. That is mainly because of their cheap and disciplined labour. There was a good possibility for Sri Lanka too to attract some of those investors here if our politicians and bureaucrats were smart enough. During the past 5 years, political instability was also another negative factor for the foreign investors to invest in projects in Sri Lanka. But, with the convincing election victory of the just elected President with a huge majority at the presidential election held on November 16, there should be a potential boost for investor confidence which will be an inducement for the investors to come to Sri Lanka for new investments.

    Thanks to those who invested in rubber projects in Sri Lanka in early eighties, today, the domestic rubber price in Sri Lanka is maintained above the world market price thereby giving some kind of relief for the survival of the local rubber farmers.

    The main reason for the drop-in rubber production in the country is the very low paid for raw rubber in the world market. In 2010, there was a shortfall of 240000 Mt of rubber price in the world market and hence the rubber prices rose up to over US $ 5 per Kg. Then all rubber producing countries expanded their rubber plantations to reap the benefit of this attractive high price. As a result, from 2011 onwards there was a surfeit of rubber in the market an excess was created and hence the rubber price started to decline again. Then most of the plantations neglected rubber fields, or totally abandoned them without tapping. Some lands were even converted to other crops. This change of attitude of rubber growers all over the world again reduced rubber production to create a shortfall in the market starting from 2014. But, the world recession started in 2013 continued to have its effect on the price of rubber thereby keeping it at very low level, below the cost of production.

    International Rubber Study Group (IRSG) has carefully analyzed the world rubber consumption and supply situation and have predicted that the raw rubber prices should reach an attractive price within the next couple of years. But, by then, will there be rubber in Sri Lanka to sell at that price? It is very unlikely. Not only that, the rubber end products manufacturers of Sri Lanka will have a tough time to purchase rubber from other Asian countries, by competing with industrial giants like China, India and Japan in this region. Then, what will be the plight of over 30,000 skilled and semi-skilled workers employed in our rubber products industry at present?

    Unfortunately, the productivity of most of the estates under private management has now fallen down to below that of rubber small holders’ due to non-adoption of Good Agricultural Practices (GAP) recommended by the RRI. It has been reported that in some of the plantations under RPCC, trees have been over tapped in merciless manner and hence young trees in some revenue areas in estates have been slaughter tapped without leaving bark to continue tapping in next 5 to 10 years. In many estates, over 50% of good trees are affected with Tapping Panel dryness (TPD) due to over extraction of latex. RRI introduced rain guards for rubber plantations to minimize crop losses during rainy months. Annually about 72 days of tapping is lost in Kalutara and Ratnapura districts due to rain interference. According to some reports, some RPCC fix rain guards and conduct double tapping far above the RRI recommendation and hence the whole idea of using a rain guard is lost and tapping panel dried trees in such estates have risen to over 50%.

    Action must be taken by the Ministry of PI to stop this destruction of rubber plantations in a degrading manner by some RPCC. In some estates under RPC management, the productivity or the yield per hectare (YPH) has dropped down to about 550 kg/Ha/yr, which is far below the average productivity of 829 kg/Ha/yr in the whole country as reported by the rubber development department. Average productivity of rubber in Sri Lanka in 2013 according to RDD was 1300. This sharp drop in YPH from 1300 to 829 within three years is attributed to poor agronomic practices followed by some RPC managed estates all over the country.

    In such poorly managed estates, apart from bad taping practices, replanting has not been done and fertilizer applications have not been carried out according to RRI recommendations for many years. From these facts, it is clear that the maximum crop that can be expected in the country for 2019 is even below 83,000 Mt; even though the RDD expect this figure to go up to 95000 Mt. In order to rectify this anomaly, Ministry of PI must get the assistance of the RRI to get the damage done to the plantation by such RPCC assessed and either to take over such badly managed estates to be managed by the state plantation corporation or to hand them over to more responsible different management company.

    RRI and the Plantations

    Rubber estates under French management in Cambodia use rain guards and conduct systematic stimulation of the clone Pb 314 and carry out tapping only once in 5 days without a single tree affected with tapping panel dryness and obtain a yield of 3200 kg/ha/ yr. If this tapping system is practiced in Sri Lanka too under strict RRI control, problem of rain interference on the yield can be mitigated; thereby increasing the productivity.

    It is very sad to note that the relationship between the Rubber Research Institute (RRI) and the Plantations has deteriorated during the past decade due to unknown reasons. But if the Ministry of PI take appropriate measures to strengthen the interactions between the RRI and the plantations to implement recommended agronomic practices while totally eliminating wrong exploitation practices too for improving productivity at least to the national average level, importation of rubber for BOI companies for value addition can be curtailed to some extent.

    It should be emphasized here that the technology developed by the RRI particularly in agronomy is quite enough to convert these badly managed estates to reasonably profitable level by improving productivity within two to three years. It is very clear from the role played by the RRISL scientists to convert rubber plantations in Myanmar and Cambodia even to overtake total rubber production in Sri Lanka in less than a decade. When they first commenced consultancy, in Cambodian plantations under UNDP sponsorship, productivity of rubber in Cambodia was only 420 kg/Ha/Yr. But, they were able to increase it to over 1100 kg/Ha/Yr in five to six years and hence, the total rubber production in Cambodia from 97000 Mt in 2014 to 145200 Mt in 2016 and over 200,000 Mt last year; which is nearly three times the total rubber production of Sri Lanka at present.

    Cambodians followed the recommendations of Sri Lankans with good faith and were able to treble their rubber production in less than 8 years. Why not plantation companies in Sri Lanka too, plan to follow the RRI recommendations to increase the rubber production to reap the benefits of the IRSG predicted attractive higher price of rubber after 2019. This is the time that people of SAARC countries to be concerned about the environment; because the world weather forecast centre reported last week that in 2100, the temperature of India, Pakistan, Sri Lanka and Bangladesh will rise by 2 degrees Celsius. If no attempts are made now itself by SAARC countries, what will happen to the productivity of all our agricultural crops and the fish population in the ocean?

    It is universally accepted that the contribution from NR plantations to the environment is equal to the contribution from the natural forest. NR plantations help to minimize Green House effect by sequestrating 10 Mt of Carbon dioxide gas per hectare per year unlike other agricultural crops. Hence, those RPCC converting low yielding rubber lands into oil palm, as a result of poor management and bad exploitation techniques followed, should be concerned of the ecological effect of the conversion of rubber estates to oil palm in this small island where we only have 18% forest cover. But, to meet the edible oil requirement, oil palm could be planted in other unused lands in the wet zone; but not in lands reserved for rubber. The Ministry of Environment too should focus more on this potential danger and take adequate measures to rectify this problem to protect the country from turning into a desert.


    Last modified on Saturday, 07 December 2019 11:49

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