Amidst the rubber industry showing a marginal improvement in exports by 12% for the first six months of 2024 – $ 488 million when compared with 2023 export earnings of $ 433 million – industry experts foresee a decline in order volumes, and they anticipate that the next three months are going to be challenging, The Daily Morning Business learns.
Speaking to The Daily Morning Business, Sri Lanka Association of Manufacturers and Exporters of Rubber Products (SLAMERP) Director General Sisira Ranatunga said: “The data forecasts a slight improvement in rubber export earnings, but due to the bad impacts of war, elections taking place in the countries and high stock levels, we predict a decline in the order volumes.”
He pointed out that in comparison to rubber export earnings of 2021 and 2022 with 2024, the country is still about 5-10% below the downline. Moreover, the factories are still running at 60% capacity, while there is 40% excess capacity unused due to market issues and high production costs.
According to SLAMERP, even though the Export Development Board (EDB) takes a lot of measures, it is not as per their requirement, and they can’t see any real input from the authorities in finding markets and they can’t see any real strategic approach and implementation. “They may have all these policies, but the implementation is very poor. There is a lot of flux on that side.”
Moreover, speaking about policies, Ranatunga stated that there are no proper policies and the investors will be thinking twice before investing in Sri Lanka, “due to the elections coming half way, it is likely for policies to be changed, high taxes imposed on employees as well as the investor’s corporate taxes, all of which negatively impact the country.”
According to the EDB export performance report in June 2024, export earnings from rubber and rubber finished products have increased by 11.8% y-o-y (year-on-year) to $ 82.63 million in June, with the strong performance in exports of pneumatic and retreated rubber tyres and tubes (3.78%) and industrial and surgical gloves of rubber (28.2%).
In addition, export earnings from rubber and rubber finished products increased by 10.91% to $ 498.84 million in the first six months of 2024, compared to the same period in 2023 attributed to increased exports of industrial and surgical gloves of rubber (11.44%) and pneumatic and retreated rubber tyres and tubes (12.84 %).
“Mainly, the upsurge has come from countries like Europe and the US, and the earning has increased by about $ 2 million along with the low cost of raw materials, globally. Moreover, international markets such as the US and European Union have shown the most significant growth in Sri Lankan rubber sector exports, while the country seeks out other markets such as India, Asian countries, and South Africa,” he said.