Mar 25, 2011 (LBO) – Sri Lankan rubber prices have recovered after a temporary fall triggered by overseas demand and supply factors, and look set to stay strong on rising global tire demand, trade officials said. Natural rubber prices at the Colombo auctions hit record highs in February and then slumped sharply after increased supply from key East Asian producing nations and fears Japan’s disaster could disrupt automobile manufacture.
“The market came down for one week,” said Upali Bandaranayake, director of brokers Forbes& Walker.
“There was a favourable crop in Thailand and Vietnam. They need to sell every day because they get huge crops, unlike here. So there was selling pressure,” he explained.
“On top of it, there were fears that Japan’s vehicle industry will collapse. So because of the uncertainty there were no buyers in the market.”
But with resumption of vehicle production by major auto manufacturers, demand for rubber recovered, given the requirement for its use in the manufacture of tires, tubes and tire-related products.
Amanda Weerasinghe, managing director of Almar Trading, a big rubber trader and exporter, said the main TPC 1X grade, which had fallen to 500 rupee levels, ro