Prices of natural rubber in the world market remained high during the year under review due to a supply short fall, and the influence of speculation. This speculative element has often proved to have an overriding effect on world market prices for natural rubber. There was however a temporary decline in prices following the triple catastrophe of the earthquake, tsunami and the nuclear plant disaster in Japan; but prices have recovered since then, and once again, mainly due to speculation.
Sri Lanka’s rubber production in 2010, increased by 12% over the previous year. Yields increased from 1,437 kg/ ha in 2009 to 1,610kg/ha in 2010 and is forecasted to increase up to 1,630 kg/ha in 2011. Similarly, total produc-tion is expected to increase further by 3.9% in 2011 over 2010. Systematic replacement of aged trees with high yielding clones is likely to be a key factor in achieving the estimated higher yields and output in Sri Lanka in the coming years. Sri Lanka remains the 8th largest producer of natural rubber in the world and is ranked 4th in productivity. The higher yields expected would thus, further strengthen Sri Lanka in the global market.
The long term outlook in the natural rubber market appears to be that the short supply conditions coupled with growing demand, would sustain high prices. However, the short to medium term outlook is likely to be influenced by the current geo-political concerns and Japan’s recovery. Considering the demand and supply mismatch, a strategy that takes into account the grower and the consumer is a need of the hour for the sustainable growth of the natural rubber markets.