The local rubber industry yesterday voiced disappointment over the government’s failure to strategically look at the cess of Rs.15 per kilo levied on rubber exports, stating it is not appropriate at a period where its prices are at an all-time low.

“It is unfair to impose a cess on the high quality, premium rubber exported. If they can provide subsidies to smallholders, they most certainly can remove the cess on exports, which will help us to be competitive in the world market,” Colombo Rubber Traders Association (CRTA) Chairman M.S. Rahim told Mirror Business. 

He said that despite repeated calls for the removal of the cess, the relevant authorities have turned a blind eye. The industry has its hopes pinned on the weather gods for better climatic conditions which will help increase production.

“It is unfair to continue to impose this specially in the current context. The cess has made exports unattractive, leading to a decline in exports of high-quality rubber. The removal will help increase and improve the revenue generated from the rubber industry,” added Rahim. Sharing similar views, Forbes & Walkers Commodity Brokers Director-Rubber Damitha Perera stressed that the government should allow the manufacturing of premium rubber for export so there will be a foreign exchange advantage.  “The CESS is suppressing local producers manufacturing good rubber. We are seeing more and more players move out of rubber production and into other crops. They are discouraged. The industry should be supported in a manner where it can be sustained in the future,” Perera asserted.

He opined that the industry should have a slab where over and above a certain price the cess can be imposed, instead of having it in place throughout, particularly at struggling times. 

While the CRTA has brought to the attention of the relevant authorities that removal of cess imposed on special grades of natural rubber sold at high prices will benefit the export sector, it stressed that further value addition to these special grades is not possible in Sri Lanka due to the existing domestic rubber product manufactures not using these grades of natural rubber as inputs into their production.

It emphasised that the objective of increasing cess to encourage domestic value addition does ‘not’ apply to these special grades of rubber.