Sept 22, 2011 (LBO) – Sri Lankan rubber products manufacturers are lobbying to double an export cess on raw rubber exports as prices remain high amid strong demand and tight local supply. Manufacturers want the export cess, that had been raised to 12 rupees a kilo only earlier this year, doubled to 24 rupees, according to Minister of Industry and Commerce Rishad Bathiudeen.
Analysts say the tax would transfer more profits from rubber farmers – many of whom are small entreprenuers – to manufacturers, while denying cultivator free access to global markets.
The boom in rubber prices have howevs brought cultivators profits in recent months.
The state had raised the cess earlier as it wants to give preference to manufacture of value-added rubber products and discourage exports in raw form.
“The cess imposed on rubber exports will serve as a measure to channel more resources to the value added industry by discouraging exports in raw, unprocessed forms,” Bathiudeen told parliament which ratified the increase, according to a statement.
The cess on export of raw rubber was increased from eight rupees to 12 rupees a kilo or two percent of the F.O.B (free on board) price, w