Rubber planters deep in crisis amid declining prices and steep rise in production costs

• Rubber output fell to historical low in 2022

Sri Lanka’s rubber planters have fallen deep into crisis with declining auction prices and steep increase in input costs on top of nearly 40 percent crop loss resulting from Pestalotiopsis disease after recording the lowest crop in recent history last year.

“The prices have come down from Rs.900 to around Rs.500 now. It’s bad enough that prices have come down, but now the cost of production has also gone above Rs.1,000, from around Rs.750 under normal circumstances,” a spokesperson for Planters’ Association of Ceylon (PA) told Mirror Business. 
With Pestalotiopsis disease freely spreading across 60 percent of the rubber estates in the absence of agrochemicals, he noted that 30-40 percent of the crop had been lost.
According to the Central Bank, the natural rubber production fell to a record low 76.9 million kilos last year, making it the lowest output since 1980.

“The impact of fertiliser shortages on immature rubber plantations during 2022 was significant, causing stunted tree growth that caused delays in the tapping stage of plantations and reduced land productivity in the period ahead. Furthermore, the scarcity of agrochemicals resulted in severe propagation of the Pestalotiopsis disease in rubber plantations during the year, affecting around 40,000 hectares of rubber plantations, resulting in a decline in yield ranging from 0-10 percent in affected rubber plantations,” he said.
The average yield of rubber reduced by 2.1 percent, year-on-year (YoY) to 665 kilogrammes per hectare in 2022 due to the reduction in tapping days. The area under tapping fell to 109,000 hectares in 2022 from 109,000 hectares a year ago, out of 139,000 hectares of rubber planted area.

The cost of production of rubber also rose by 30.3 percent YoY in 2022. However, high auction prices prevailed during the year allowed rubber growers to stay afloat.
Meanwhile, outstanding loans and advance to rubber growers by commercial banks rose by 42.7 percent YoY to Rs.59.12 billion in 2022.
In the year, the domestic consumption of raw rubber by the industrial sector contracted by 12.4 percent YoY to 117.3 million kilogrammes, which was partially attributed to the decline in demand for medical gloves in both domestic and global markets as the COVID-19 pandemic faded away.

In addition, the PA Spokesperson noted that rubber planters are finding it increasingly difficult to find required labour for tapping in traditional rubber growing areas due to socioeconomic changes. 
Therefore, he pointed out that less labour-intensive crops such as oil palm has become more economically viable.
Rubber has already been introduced in non-traditional rubber growing areas such as Monaragala and Mullaitivu due to climate change and labour shortages in traditional rubber growing areas. 
Under the new planting programmes, latex harvesting commenced in 2022 at the first established rubber field in Mullaitivu in the Northern Province.