Sri Lanka’s rubber market witnessed a price decline in February, accompanied by a notable reduction in the quantity offered at the public auction, according to the latest report from Forbes and Walker Commodity Brokers.
The total quantity of rubber auctioned fell to 577,368 kilograms from 711,379 kilograms in February 2024, reflecting ongoing market challenges and shifts in demand.
The top-grade LCR 1X fetched an average price of Rs. 925 per kilogram, while other grades saw declines. Latex Crepe No. 1 dropped by Rs. 65 per kilogram, and No. 2 fell by Rs. 28.75. Prices for No. 3 and No. 4 grades declined by Rs. 11.25 and Rs. 70.75, respectively. Scrap Crepe also experienced a downturn, except for 3X Brown and 4X Brown, which recorded slight increases.
The Rubber Sheet Scrap (RSS) segment faced limited availability as tire manufacturers turned to lower-priced imported RSS, and smallholders diverted latex to centrifuged latex processing plants or withheld stocks due to unfavorable pricing. No RSS grades were quoted at the auction throughout February.
The price decline is attributed to reduced demand from local industries, US tariff regulations, and falling crude oil prices.
To support the rubber industry, the Sri Lankan government has allocated Rs. 1,500 million in the 2025 budget to establish an industrial estate focused on value-added automobile components and rubber products, aiming to enhance the sector’s long-term growth and global competitiveness.