LEAF DISEASE HITS SRI LANKA RUBBER

  A leaf disease affecting seven pct of
  Sri Lanka's rubber plantations may reduce output this year and
  raise currently depressed prices, industry officials and
  researchers told Reuters.
      About 2,900 hectares of rubber planted with the Rubber
  Research Institute (RRI) clone 103 have been hit by the fungus
  "corenes pora" which attacks the roots of the tree and kills the
  leaves. The disease was first discovered about six months ago.
      Trade sources say prices might boom once again if the
  crisis leads to output below the 1987 target of 143,000 tonnes.
  Last year's output is estimated at between 133,000 and 135,000
  tonnes.
      Researchers say the fungus could spread to other rubber
  clones if no immediate action is taken.
      "The RRI is considering asking estates to remove the trees
  seriously affected by the fungus because it was too late to use
  chemicals to kill the disease," an Institute spokesman said.
      Senior industry and research officials met yesterday at
  Padukka, east of here, to discuss ways of controlling the
  fungus which is affecting estates mostly belonging to the State
  Plantations Corp and Janatha Estates Development Board.
      The two state-owned groups account for 30 pct of rubber
  land with the balance belonging to small private producers with
  a total of 145,600 hectares.
      The RRIC 103 is a new clone propagated by the Research
  Institute as high yielding and recommended two years ago for
  planting. Only the two state groups seriously planted these
  clones while smallholders preferred the low-yielding but older
  PBX Malaysian clones.
      Officials at yesterday's crisis meeting said it was decided
  to uproot only some of the affected trees while others would be
  treated. They declined to comment on other decisions taken.
      Trade sources said supplies had improved in the past week
  but prices had hit their lowest since last December. "If there
  is a shortage of rubber, prices are bound to rise," a spokesman
  for a company buying on behalf of the Soviet Union said.
      Rubber prices, particularly crepe, fell sharply by about
  four rupees a kilo between December and March. The best crepe
  one-X traded at 23.68 rupees a kilo, averaged 19.75 at this
  week's auction. Sheet prices fell by a rupee in the same
  period.
      Quantities offered at the auction also fell to an average
  of 300 tonnes per auction last month from 800 tonnes in
  December because of wintering in early February in producing
  areas.
      Over 550 tonnes were offered at this Tuesday's auction with
  the supply position showing improvements.
      Trade sources said the smaller availability of rubber last
  month did not raise prices as on previous occasions.
      "Some factors, like less storage space from excess stocks,
  meant we could not buy much at the auction until we disposed of
  the rubber we already had," one buyer said.
      Other sources said there were few forward contracts and
  speculative buying last month, while delays in steamer arrivals
  aggravated the problem.
      European buyers delayed their purchases because of winter
  closures of factories and also in the hope that prices would
  ease further.
      They said another problem that could hit the industry is
  the dry spell in producing areas. "If the inter-monsoonal rains
  expected in late March/April are delayed, we would have further
  shortages," one official said.
      "But this again could benefit prices," a buyer said.
  

