Prices at Sri Lanka's two-day natural rubber auction rose this week on firmer international prices and crimped local supply, brokers said on Thursday.
"Overseas demand is fairly steady, and forwards for April and May sold for more than 125 rupees a kilo," said Damitha Perera for Forbes and Walker.
"Prices should stay on. The drought is there and volumes are falling. There will be a shortage by April," he said.
Perera said volumes in the market, including stocks at the end of January, and the tapping of rubber this year were falling.
The market is also watching the Sri Lankan rupee which has depreciated against the US dollar after a snap election call, and Perera said a depreciation would help local prices.
A total of 359 tonnes of latex crepe, 130 tonnes of scrap rubber and 22 tonnes of sheet rubber were up for sale this week.