Rubber Exports Severely Affected by High Shipping Costs

Rubber exports are being slowed down because many companies had to suspend production for lying in lockdown areas. High freight rates are forecast to last until 2022 and hurt Vietnam's rubber exports.

According to the statistics of the General Department of Customs under the Ministry of Finance, in the first 15 days of August 2021, Vietnam's rubber exports reached 87,340 tons worth US$143.1 million, down 12.3% in volume and 13.2% in value compared to the last 15 days of July, and down 18.5% in volume but up 10.2% in value over the same period of 2020.

In the year to August 15, rubber exports amounted to over 1 million tons valued at US$1.68 billion, up 27% in volume and 66.1% in value from a year earlier.

The Import-Export Department under the Ministry of Industry and Trade said rubber exports are being hit as many companies had to suspend production operations in lockdown areas, or their workers are medically quarantined or living in pandemic areas.

Meanwhile, the COVID-19 pandemic has disrupted transportation. Shippers lack empty containers while high freight rates are forecast to last until 2022, which will adversely affect Vietnam's rubber exports.

However, Vietnam's rubber exports to major markets such as the EU, China, the United States and India are expected to further expand on gradual economic recovery thanks to eased lockdown measures.

In the domestic market, in mid-August 2021, latex prices tended to look up in response to the world market.

Currently, the latex purchasing price in Binh Phuoc province is ranging from VND320 to VND327 per degree TSC (Total solid contents). Many smallholding rubber farmers halted tapping latex to follow physical distancing as per Directive 16.

In Binh Duong, the buying price is VND337 - 340 per degree TSC. In Dong Nai, Dong Nai Rubber Co., Ltd also announced to increase the purchase price of rubber latex produced by some smallholders.

By Le Hien, Vietnam Business Forum