Bad weather, strong demand to keep rubber prices up this week

June 12 (LBO) - Rubber prices in Sri Lanka are expected to stay strong this week as bad weather and a resulting supply crunch drive prices upwards, brokers say.
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Annual monsoon rains until August is affecting tapping on plantations, with supplies usually falling by as much as fifty percent at this time of the year. Brokers say the resulting low volumes coming in to the market over the next few days will keep prices up, coupled with strong buying from global markets.
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Prices of crepe rubber - Sri Lanka's key export touched 321.00 rupee levels last week, from highs of 390.
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00 rupees days before, while sheet rubber prices closed at 235.00 rupee levels. "We expect that there will be a gradual upward trend in prices from now, increasing by another ten to fifteen rupees," Damitha Perera, Director Rubber Department at Forbes and Walkers Commodity Brokers told LBO on Monday.
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Global demand, especially from markets like Japan and Singapore are also pushing up demand, with heavy buying last week, Perera said. "It's a buyers market." Sheet rubber is about 35 percent of the country's total production, produced almost entirely by smallholders. Demand is almost entirely locally driven, used up by domestic industries. Crepe is about 35 percent of local production and liquid latex used to make gloves, about 30 percent, most of which is produced by plantation companies.
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Sri Lanka produces 104.4 million kilos of rubber and the total area under cultivation is 116,000 hectares.
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