08:50 | 03/07/2015 Trade
The nation’s natural rubber industry rebounded modestly in May as exports recorded higher prices and volume than April, according to the Ministry of Agriculture and Rural Development (MARD).
During May, the country shipped 78,000 tonnes of rubber to foreign markets generating US$114 million of revenue, up from 58,000 tonnes exported at US$84 million for April.
During the five month period January-May, exports of natural rubber saw an on-year increase of 30.1% in volume to 330,000 tonnes with an on-year reduction in value of 2.9% to US$475 million.
Meanwhile, the ministry said in early May, the export price of Vietnam’s key rubber product (SVR 3L) reached US$1,655 per tonne, US$73 per tonne higher than the previous month’s sales price.
The export price of SVR 3L rose to US$1,700 per tonne at the end of May and US$1,790 per tonne on June 12, the ministry said.
In the world market, the June 1-12 average price of ribbed smoked sheets (RSS 3) rubber on the Tokyo Commodity Exchange was US$1,919 per tonne for futures contracts, up US$67 per tonne or 3.6% compared to the average prices in May.
Notably, the price of natural rubber decreased US$75 per tonne from the average price for June last year.
Due to an extended global production surplus the market is experiencing a glut with the price of rubber expected to remain stagnant at US$1,500 and US$2,500 per tonne through 2020.
In addition, Dr Tran Thi Thuy Hoa, head of the Vietnam Rubber Association said demand is slowing in China, the world’s top buyer and tire exporter, and natural rubber is increasingly facing stiffer competition.
The price of an alternative to natural rubber made synthetically from crude oil continues to decrease and is now half what it cost a year ago. However, Hoa speculated the price could possibly increase after 2020.
She suggested the rubber industry reduce its output, production costs, and investment for production in line with the reduction in global demand and reallocate the nation’s resources to expand other non-rubber industry exports.
It should also strive to develop the Made-in-Vietnam brand name, increase trade promotional activities, and offer incentives for the development of rubber and all of the nation’s industries, Hoa underscored.
Echoing Hoa’s sentiments, the National Agro-Forestry-Fisheries Quality Assurance Department in turn pointed out that in light of reduced demand producers should remain vigilant in monitoring rubber production to insure quality.
They should also, within the constraints of reduced investment, upgrade production lines with modern technologies, and continue to beef up quality standards for processing of natural rubber and related products./.
Source: VOV News