During recent years, rubber is among Vietnam’s major commodities for export and in the list of products with export turn-over exceeding US$1 billion. In very last months of the year, though price of rubber on the global market witnesses a downward trend, the industry producing rubber for export still holds a belief that obstacles will be overcome soon.
In 2001 – 2006 period, the average growth of Vietnam’s rubber export reaches 17.66 percent, the highest growth among countries exporting rubber (for instance, Thailand: 2.37 percent; Indonesia: 5.27 percent and Malaysia: 3.52 percent). 2006 is the first year to witness Vietnam’s rubber export exceed US$1 billion together with eight other commodities. In that year, the whole country gets 708 tonnes of rubber exported at the average price of US$1,810 per tonne, bringing home a total turn-over of US$1.28 billion, US$500 million higher than target and 60 percent higher than the value of 2005. In 2007, Vietnam’s rubber export is around 720,000 tonnes, which equals to US$1.4 billion, an increase of 1.7- percent in terms of volume and 8.9 percent in terms of value compared to that of 2006. Vietnam currently ranks the fourth biggest country in the world to export rubber, trailing after Thailand, Indonesia and Malaysia. Vietnam’s rubber gets exported to nearly 40 markets, among which China is the largest consumption market, accompanied by Korea, Taiwan, Germany, Russia, the U.S and Japan, etc. It should be noted that in 2007, rubber exported to Malaysia market sees a very strong growth, up 236.6 percent in terms of volume and 254.07 percent in terms of value against 2006.
Upon the entry of 2008, many experts forecast that rubber export turn-over can possibly exceed US$1.5 billion. The global demand for rubber is still very large, given the context supply is lower than demand. More importantly, demand for rubber of Vietnam’s major importers is very huge. By the end of September 2008, Vietnam has exported some 455,000 tonnes of rubber of all types, just equivalent to 91.6 percent of the corresponding period of 2007. However, thanks to high export price, the export turn-over still enjoys an increase of 34.24 percent, reaching US$1.25 billion.
However, the global price of rubber has gone down dramatically, making quite a few enterprises within the rubber industry concerned. The average export price of SVR3L rubber in September reaches US$2,941 per ton, down US$204 against August. According to the Ministry of Trade and Industry, the global economic slow down will cast a significant influence on the demand for tyres and tubes and this is usually the period when supply of natural rubber reaches its peak, which will make price of natural rubber drop. However, it will not decrease too much since during recent time, price of rubber has been high, making rubber reserve of countries with large rubber consumption fall. When price goes down, these countries will accelerate their purchase to increase their reserve, which will foster price of natural rubber. With this analysis, the Ministry of Trade and Industry forecasts that rubber price in final months of 2009 will be acceptable and will not experience a dramatic decrease.
General Director of Vietnam Rubber Group, Mr Le Quang Thung, believes that based on the production and consumption situation of the Group during the first nine months of 2008, even when export price continues to fall, rubber growers still have a very successful crop. The quantity of remaining rubber in this year is around 140,000 tonnes. Mr Le Quang Thung instructs that thorough and appropriate calculations are necessary to stabilize price and maintain customer loyalty.
“I still strongly believe in changes of the rubber consumption market which are due soon,” says Mr Thung. However, he adds that it will be hard for rubber price to reach the high level as in early months of 2009. As such, the plan made for 2009 needs to be thorough and active, available with methods to deal with bad situations. First and foremost, it is necessary that measures to cut investment cost and production cost be sought for. The low price of rubber latex which can continue in the time to come also serves as a good chance for enterprises and growers to do away with rubber gardens of low yield and quality, replacing by better ones. This situation also forces enterprises to work out methods to keep traditional, loyal customers and strategic markets. In coming time, the Group will be determined in instructing enterprises in the Central Highlands to accelerate their signing of long-term contracts. This is an appropriate solution to stabilize consumption, especially when the market undergoes heaps of fluctuations in a negative direction for producers.
Hai Nguyen
Vietnamese
