Lanka takes rubber marketing lessons from India

Friday, 15 October 2010 00:37 -     - {{hitsCtrl.values.hits}}

Kottayam: India’s rubber market has become a model for a neighbouring, Sri Lanka, which also is a big producer of the commodity. The reason being the rubber market in India is so regulated that it hardly allows any leakage of farmer’s earnings through trade intermediaries.

According to a delegation of rubber experts from Sri Lanka, compared to India’s mere 5% difference between farm price and market price, Sri Lankan rubber farmer loses at least 20% of the market price to trade intermediaries.

The team from Sri Lankan ministry of plantations, has been touring India’s rubber institutes, Rubber Board, plantations and processing centres to gather insights to upgrade Sri Lanka’s rubber marketing infrastructure.

“We go by a system of traders collecting rubber from farmers and auctioning them twice a week. This is picked up by wholesalers. In the end of the day, a rubber farmer in Sri Lanka gets only 80% of the international price of rubber,” Upali Dissanayake, Additional Secretary, Ministry of Plantation industries of Sri Lanka, told FE.

On the contrary, in India, a rubber farmer gets as much as 95% of the international price. The Sri Lankan team visited Rubber Research Institute of India in Puthupally, Kayyalathara Rubbers, Chennattumattam Rubbers and also familiarized themselves with Indian smoke-drying of latex.

“India’s supply chain efficiency is a fruitful lesson for other countries,” Tanuja Frannande, assistant director, ministry of plantations, Sri Lanka said.

Sri Lanka has an average annual rubber production of 1,37,000 tonne tonne. Of this, 42% is sold as sheet rubber.

In a year when the rubber production increased by 6%, the island nation is planning to increase its production from rubber plantation and improve marketing efficiency. A census of areas under rubber plantation is going on in Sri Lanka. An additional 2,000 hectares will come under rubber this year in areas like Moneragala, Badulla and Anuradhapura, Dissanayake said.

Sri Lanka exports 40% of its rubber production. About 60% is used up by local industries for auto-rickshaw tyre, mattresses and other products. After March 2010, rubber production has lagged in Sri Lanka due to bad weather and loss of man days.

“Rubber growers are not able to get the best from the prices arrived at rubber auctions, compared to their Indian counterparts,” Sri Lankan officials said.

(Financial Express)