Vietnam was the world's third largest natural rubber producer and the fourth largest exporter after Thailand, Indonesia and Malaysia, in 2013. Currently, when the rubber supply is higher than demand, Vietnam should conduct comprehensively solutions to push export and improve rubber's competitiveness.
Export needs a push
According to Ministry of Agriculture and Rural Area Development, rubber export in June is estimated to be 86,000 tonnes, earning US$153 million. With this estimation, for the first 6 months of 2014, rubber export is likely to reach 337,000 tonnes, raking in US$644 million, down 11.7 percent in terms of quantity and 33 percent in terms of value over the same period of 2013. On average, rubber was exported at a price of US$1,842 a tonne for the first 5 months of 2014, down 28.9 percent over the same period of 2013.
Referring to export market, although China and Malaysia remain Vietnam’s largest consumption markets of rubber for the first 5 months of 2014, the value is in the downtrend over the same period of 2013. For the first 5 months of 2014, Holland’s market had the sharpest growth, 6 times higher in terms of quantity and 5 times in terms of value over the same period of 2013.
Since the beginning of 2014, rubber production has faced problems such as: rubber’s price may drop dramatically because of supply surplus; the condition that farmers cut down rubber trees and grow other plants because the former is not profitable. Besides, there are other obstacles like export tax, VAT tax, credit support package for farmers, and export guarantee.
Recently, a conference on rubber production 2014 was organised to discuss solutions for upgrading competitiveness for Vietnam’s rubber. Addressing the conference, Mr Cao Duc Phat, Minister of Agriculture and Rural Area Development emphasized that rubber is an important industry, influencing largely many farmers’ life. Vietnam should push up trading, diversify export markets to exploit ultimately advantages of “white gold”.
Also in the conference, delegates said that it was time to promote restructuring the rubber industry for it to develop suitably with world’s demand, as well as to increase export value.
Do not run after area expansion
The cutting down of rubber trees and growing other plants of farmers has caused many damages and turbulences for Vietnam’s rubber industry. Explaining this situation, Mr Tran Ngoc Thuan, Chairman of Vietnam Rubber Group, when rubber’s price was high, many people rushed for banking loans to newly grow rubber trees or repurchase plants. By now, when price has decreased, farmers face losses and cut them down. They have cut down not only 2 to 3 year old rubber trees, but also trees with rubber latex. In another case, plant owners have not harvested rubber latex because revenues from rubber latex cannot cover costs for employees.
As price of rubber latex has dropped to the lowest level for the last 3-4 years, Mr Cao Duc Phat officially required farmers not to expand newly grown rubber tree area, at the same time to harvest latex properly, reduce costs for employees. Planting trees more effectively will create higher production with lower costs. Moreover, intensive production is needed to improve added value for rubber.
The planting department has also warned provinces of not expanding rubber tree area. At the same time, they should apply techniques to harvest latex to reduce prices. Besides, provinces should adjust production area in the rubber industry in direction of stopping growing new rubber trees, concentrating on re-growing out date trees, as well as producing intensively currently rubber plants to improve productivity and quality. Specifically, rubber plants outside planning areas, weak plants should be replaced by other trees with higher benefits; old rubber plants should be cut down for woods and be prepared for re-growing.
Vietnam Rubber Group has also suggested to grow new rubber trees in planning areas, as well as proposed several issues like: VAT, corporate income taxes, credit package for rubber industry, policies on land rent fees, insurances, storage, mechanisms for service environment for rubber trees in the future.
Ha Vu
Vietnamese
10/12/2024
Hanoi, Ho Chi Minh City
