Vietnam ranked the world's third largest natural rubber producer and the fourth largest exporter following Thailand , Indonesia and Malaysia in 2013. Currently, when the rubber supply exceeds the demand, Vietnam needs to enhance the competitive edge to be able to maintain its rank in the global market, the Vietnam Business Forum Magazine (VBF) reported.
According to Ministry of Agriculture and Rural Area Development, rubber export in June was estimated to be 86,000 tonnes, earning 153 million USD. With this estimation, in the first 6 months of 2014, rubber export is estimated to reach 337,000 tonnes, raking in 644 million USD, 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 1,842 USD 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 remained Vietnam ’s largest consumption markets of rubber in the first 5 months of 2014, the value was in the downtrend over the same period of 2013. In the first 5 months of 2014, Holland ’s market posted the sharpest growth, 6 times higher in terms of quantity and 5 times higher in terms of value over the same period of 2013.
Since the beginning of 2014, rubber price dramatically dropped due to supply surplus; Many farmers cut down rubber trees and cultivated other plants. Besides, there were many other obstacles like export tax, VAT tax, credit support package for farmers, and export guarantee.
At a recent conference on rubber production 2014, Minister of Agriculture and Rural Area Development Cao Duc Phat emphasised that rubber production was an important industry, having great impacts on farmers’ income. As a matter of fact, Vietnam should diversify its rubber export markets.
Also at the conference, delegates said that it was time to promote restructuring the rubber industry in order to develop the sector in a sustainable manner as well as to increase export value.
Cutting down of rubber trees and growing other plants of farmers have caused great losses for Vietnam ’s rubber industry. Explaining this situation, Chairman of Vietnam Rubber Group Tran Ngoc Thuan said when rubber’s price was high, many people rushed to borrow capital from the banks to grow rubber trees or repurchase young 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, planters 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, Minister 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. 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 on old areas, as well as producing intensively rubber plantation 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 wood and be prepared for re-growing.
Vietnam Rubber Group also proposed several incentives relating to VAT, corporate income taxes, credit package for rubber industry, policies on land rent fees, insurances, storage for rubber latex in the future.-VNA
According to Ministry of Agriculture and Rural Area Development, rubber export in June was estimated to be 86,000 tonnes, earning 153 million USD. With this estimation, in the first 6 months of 2014, rubber export is estimated to reach 337,000 tonnes, raking in 644 million USD, 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 1,842 USD 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 remained Vietnam ’s largest consumption markets of rubber in the first 5 months of 2014, the value was in the downtrend over the same period of 2013. In the first 5 months of 2014, Holland ’s market posted the sharpest growth, 6 times higher in terms of quantity and 5 times higher in terms of value over the same period of 2013.
Since the beginning of 2014, rubber price dramatically dropped due to supply surplus; Many farmers cut down rubber trees and cultivated other plants. Besides, there were many other obstacles like export tax, VAT tax, credit support package for farmers, and export guarantee.
At a recent conference on rubber production 2014, Minister of Agriculture and Rural Area Development Cao Duc Phat emphasised that rubber production was an important industry, having great impacts on farmers’ income. As a matter of fact, Vietnam should diversify its rubber export markets.
Also at the conference, delegates said that it was time to promote restructuring the rubber industry in order to develop the sector in a sustainable manner as well as to increase export value.
Cutting down of rubber trees and growing other plants of farmers have caused great losses for Vietnam ’s rubber industry. Explaining this situation, Chairman of Vietnam Rubber Group Tran Ngoc Thuan said when rubber’s price was high, many people rushed to borrow capital from the banks to grow rubber trees or repurchase young 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, planters 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, Minister 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. 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 on old areas, as well as producing intensively rubber plantation 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 wood and be prepared for re-growing.
Vietnam Rubber Group also proposed several incentives relating to VAT, corporate income taxes, credit package for rubber industry, policies on land rent fees, insurances, storage for rubber latex in the future.-VNA
