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.