Nation’s rubber industry faces shortage of latex

The country’s rubber industry is suffering from a shortage of latex, which has driven up the export price, experts have said.

Statistics from the Ministry of Agriculture and Rural Development show that rubber exports in the first four months of the year reached 173,000 tonnes, worth US$445 million – 23.8 per cent higher than the same period last year in terms of quantity.

Export prices jumped $2,650 per tonne, an increase of 92 per cent over the same period last year.

Tran Thuy Hoa, general secretary of the Viet Nam Rubber Association (VRA), said rubber prices had increased markedly against last year, bringing higher profits to producers.

“However, the level is well below the highest price of $3,000 per tonne in 2008,” Hoa said.

She added that price rises were due to the recovery of the global economy, especially in industrial production.

“In addition, increasing domestic rubber consumption has also contributed to higher prices,” she said.

She added demand was driven by new tyre-making factories, including the South Korean Kumho Tyre Plant in southern Binh Duong Province, which produces 3 million light lorry tyres a year. Other factories typically required about 80,000 tonnes of rubber to make 4.45 million tyres.

“Domestic rubber consumption last year was 120,00 tonnes, accounting for 16.6 per cent of the country’s total natural rubber production. This year, it is expected to be 25 to 30 per cent,” she said, adding that demand would increase continuously up to 2019.

Head of the Ministry of Agriculture and Rural Development’s Agro-Forestry Product Processing and Salt Industry Department Le Xuan said rubber exports this year would be good but that productivity would just marginally exceed that of last year due to the dry weather.

“The industry, therefore, will barely be able to reach its export target of 780,000 tonnes of rubber this year,” Xuan said.

The ministry plans to plant an additional 40,000ha of rubber trees – capable of producing 770,000 tonnes – this year, increasing the country’s rubber plantation area to 715,000ha.

The failure to meet demand has pushed up the price of products made of rubber such as tyres and mattresses by 5 per cent to 15 per cent.

According to Vo Duc Anh Commerce and Services Co, the Southern Rubber Industry Joint Stock Company (Casumina), Sao Vang Rubber Joint Stock Company (SRC) and Da Nang Rubber Company planned to increase prices by 10 per cent this month.

The company said this was the third adjustment in the last four months.

A representative from Casumina said Viet Nam Chemicals Group’s companies had increased their prices. Accordingly, motorbike tyres were up 5 per cent, while car tyres cost 10 per cent more.

He said the rubber price currently stood at VND70,000 ($3.7) per kilo because it was not easy to buy latex.

He added that rubber makers had taken on board losses to retain their market share and been forced to axe promotional campaigns.

“Price adjustments are unavoidable as the rubber price is expected to remain high for some time,” he said.

Agencies also said the price of imported tyres from Taiwan, mainland China and Thailand had increased.

Meanwhile, mattress makers have raised prices by as much as 15 per cent.

Hoa said the Government should support the industry with trade promotion campaigns.

Viet Nam News

Tags: Vietnam latex, Vietnam Rubber, Vietnam rubber industry