Lower price, less consumption, increasing stocks and competition have been confronting rubber sector in the past five years.
According to Vietnam Rubber Association, in 2015 Vietnam exported natural rubber to 78 markets. China continues to be the biggest market of Vietnam with over 5,780,000 tonnes, 50.3 per cent of the total export, following by Malaysia and India.
In order to maintain its credibility with customers and partners on export of natural rubber, Vietnam in three years (2013-2015) continued the second rank in capacity, third rank in output (8 per cent of world output) and fourth in export (11 per cent of market share). Vietnam can maintain the output of 1 – 1.4 million tonnes/year from 2016 onward.
Though with great potential, since 2012 the consumption declined due to world economic recession, the demand in rubber increased only 1.8 per cent, while the supply increased by 6.3 per cent as many countries increased rubber acreage, rubber price continued to drop in 2012-2015.
Mr Vo Hoang An, Vice President and Secretary General, Vietnam Rubber Association, disclosed that with international economic integration, especially import tax reduced to 0 per cent, Vietnam rubber sector is confronted with enormous challenges in price, quality, trademark as Vietnamese rubber remains low, trademark unknown, human resource weak, production cost high, etc. There are also other challenges in capital resource, manpower, environment protection, is management, etc. affecting competitiveness.
Mr Vo Hoang An said: “Rubber products imported under trade agreements at tax rate 0 per cent will be a difficult challenge as Vietnamese products are inferior in both quality and price”. He also pointed out that Vietnamese businesses have to compete even inside Vietnam when natural rubber imported at tax rate 0 per cent from Malaysia, Thailand and Singapore with better quality.
Among 12 TPP members, Vietnam and Malaysia are rubber producing countries with 3rd and 4th positions in world ranking. The enforcement of TPP will lead to harsh competition between Vietnamese rubber products exported to the US, Japan, Australia with products of other TPP members, Malaysia and Singapore. Therefore, it would be very difficult if Vietnamese products are poorer in quality and price. To expand export markets, Vietnam must prove certificates of origin of rubber and wood-based products.
Vietnam Rubber Association recommended that in face of challenges in world market, the government and related authorities should adopt appropriate policy to dismantle hurdles and help businesses in promoting export and consumption of rubber products. Such measures could be budget support for trade promotion, market diversification, as well as avoiding risk in limited markets. In other hand, national technical standards should be applied to input quality, removing hurdles in value-added taxes to increase business competitiveness.
Huong Ly
Vietnamese
