High costs and tariffs push Sri Lanka’s rubber exports to historic lows

Sri Lanka must urgently address the continued decline in rubber export earnings, which have fallen below US$950 million this year, Export Development Board Chairperson Mangala Wijesinghe said.

Speaking at a government press briefing reviewing export performance over the past 10 months, Wijesinghe said that rubber exports, once consistently generating between US$1.3 billion and US$1.4 billion annually, have seen a steady contraction in recent years.

“More recently that number has further declined below $950 million,” he said.

Wijesinghe contrasted the downturn in rubber with the strong performance of the coconut export sector, which recorded a 43% increase in earnings and surpassed US$1 billion within the first 10 months of the year.

He attributed the coconut sector’s growth to export diversification and increased production.

The EDB chief said high production costs and a drop in output are among the main challenges facing the rubber industry.

He noted that exporters have been significantly affected by new U.S. reciprocal tariffs introduced this year, which impose a 20% country-specific duty on Sri Lankan rubber products in addition to a 10% universal baseline tariff.

About one-third of Sri Lanka’s rubber exports are destined for the U.S. market.

“With the 20% tariff that is levelled this year, our exporters have been facing a certain level of discomfort,” Wijesinghe said, adding that the rate had initially been set at 44% before being reduced to 30% and later to 20%.

He said exporters have requested government support to diversify markets and products. “For that the Government is ready to take a significant decision.”

Wijesinghe said consultations for the National Export Development Plan revealed that industry stakeholders aim to increase rubber export revenue to US$3 billion, though no specific timeline has been set.

“We have consulted various parties, especially rubber industry persons who have informed us that they wish to increase rubber export earnings from the existing earnings to $3 billion,” he added.