Sep 09, 2013 (LBO) – Sri Lanka’s Eastern Merchants, a rubber export firm said it lost 17 million rupees in the year to March 2013, from a profit of 105 million rupees a year earlier as world rubber prices dropped. Car sales in India had plunged 20 percent and listed Indian tyre companies had also performed badly.
Revenues also dropped to 2.5 billion rupees from 4.6 billion rupees a year earlier.
“Our turnover was mainly affected due to sluggish sales of natural rubber, which is the main revenue generator of our Company,” chairman J B L de Silva told shareholders.
“The US, EU and India are our key export markets for natural rubber and the fragile economic conditions in these markets led to reduced demand for the commodity.”
“As traders, a sustained downward trend in rubber prices is far from ideal as you
are compelled to release stocks at unfavourable prices to continue operations.”
De Silva said the firm had cut stocks and become lean to escape the risk of volatile prices.
Global commodity prices, including, foods, energy and metals tend to collectively ‘rise’ as the US Federal Reserve for example prints money and the credit system transmits the monetary policy to the real economy d