Sri Lanka is considering limiting rubber imports for export sectors in order to keep local rubber prices stable, according to Cabinet spokesman Minister Bandula Gunawardana.
When necessary, Sri Lanka export industries licenced by the Board of Investment may import rubber. Some tyre companies, in particular, require lower grade rubber, which is in short supply.
According to Gunawardana, Plantations Industries Minister Ramesh Pathirana informed cabinet that authorities were attempting to curb rubber imports in order to keep domestic prices high.
He claimed that latex prices in Sri Lanka, in particular, have fallen, lowering farmer income.
During the Coronavirus crisis, demand for latex (liquid rubber sap) increased in tandem with demand for gloves.
Malaysian and Thai rubber prices have also fallen in recent weeks.
Rubber and other commodity prices soared as US Federal Reserve Chairman Jerome Powell printed money to ‘create jobs.’
The commodity bubble is currently deflating as US monetary policy tightens. Tea prices in Sri Lanka have risen in both dollar and rupee terms as a result of the currency crisis.
Tea prices tend to fall in dollar terms later than other commodities.