Vietnam Rubber Industry: Production, Performance, and Potentials

The rubber industry, a key and resilient part of Vietnam’s agriculture, remains vital to export earnings and industrial supply chains. Despite global headwinds and fluctuating demand, Vietnam remains among the world’s top rubber producers and exporters, with new prospects opening in value-added processing and eco-friendly manufacturing.

For decades, rubber has been a staple of Vietnam’s agricultural export portfolio, supporting rural incomes across the South and Central Highlands while feeding regional manufacturing chains for tyres, gloves, footwear, and industrial goods. The sector is vital for two main reasons: it provides livelihoods for hundreds of thousands of smallholders and plantation workers, and serves as a tradable commodity that significantly boosts export earnings.

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Globally, Vietnam competes with long-standing producers such as Thailand, Indonesia, and Malaysia. After the pandemic shock and a period of demand rebalancing, markets have not returned uniformly: some downstream sectors (automotive tyres, industrial) recovered faster than others (certain consumer goods), and new demand pockets, medical gloves and EV-related components, have emerged.

At the same time, the industry is at a tactical inflection point: moving beyond commodity exports toward processed, traceable, and sustainable products is no longer optional for access to premium markets.

Production landscape

Output and key figures

Vietnam’s natural rubber production has remained stable in recent years, reaching 1.3 million tonnes in 2024. This places the country among the top three producers globally, after Thailand and Indonesia. That scale underpins a significant processing base and anchors many downstream industries domestically. Production includes natural rubber (the bulk) and smaller volumes of synthetic rubber used by local manufacturers; the latter is primarily feedstock for domestic compounding and does not figure as an export commodity in the same way.

However, volume alone hides two realities. First, output depends on plantation age and climate changes, as older trees produce less, and replanting has been slow in some areas. Second, export revenue fluctuates with global prices; thus, managing value (through grading, certification, and processing) is just as important as the total volume.

Supply chains and production hubs

Rubber cultivation clusters are concentrated in the Southeast and Central Highlands. The principal provinces are Binh Duong, Binh Phuoc, Tay Ninh and Dong Nai in the Southeast, and Gia Lai and Dak Lak in the Central Highlands. These provinces combine historic plantation investments, suitable agro-climatic conditions and local labour availability.

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The industry’s production model is mixed as large state and private plantations coexist with a very large base of smallholders, such as those associated with the Vietnam Rubber Group and major private players. Smallholders supply most of the raw latex in some provinces. As estimates vary by year and source, the sector’s fragmentation further complicates quality control and traceability.

In recent years, processors and exporters have experimented with contract procurement and aggregation models to stabilise quality and procurement volumes from smallholders, but the scale implementation of those models remains uneven.

Technological and sustainability trends

Verified sourcing gains ground

Sustainability and certification initiatives, such as the Forest Stewardship Council (FSC) and the Programme for the Endorsement of Forest Certification (PEFC), are being piloted by larger estates and by processors seeking access to European markets sensitive to deforestation and supply-chain integrity. Certification is beginning to matter at scale, as buyers in the EU and some corporate purchasers demand verifiable sourcing.

Enhancing productivity through digitalization

Plantation managers and larger processors are deploying basic digital tools for yield monitoring, inventory control, and traceability pilots. These systems are not yet ubiquitous, but where applied, they improve harvesting schedules, reduce waste, and enable a tighter link between farm-gate collection and processor quality controls. Additionally, the sector has broadened into rubber wood processing – a value-added line that supplies furniture and construction inputs and smooths revenue cycles tied to latex price swings.

Export performance and market outlook

Export growth

In the first eight months of 2025, Vietnam exported 1.11 million tonnes of rubber, earning US$1.98 billion, a 12.6% increase in value year-on-year despite a slight 0.6 percent drop in volume.

The average realized export price in 2025 was US$1,775 per tonne, up approximately 13.2 percent compared to the same period in 2024, reflecting tighter supply and stronger grade mix.

According to the Vietnam Rubber Association (VRA), Vietnam’s raw and semi-processed rubber exports reached about 2 million tonnes valued at US$3.4 billion in 2024, showing an 18.2 percent increase in value that offset a 6.2 percent decrease in volume. Meanwhile, the total export value of the entire rubber industry in 2024 hit a record US$10.2 billion. This includes exports of deep-processed rubber products like car tires, rubber gloves, and others, totaling US$4.5 billion, as well as rubber wood exports, estimated at US$2.3 billion.

Price trend

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Vietnam’s rubber export prices recorded a significant uptrend in 2024, reflecting tighter supply conditions and resilient demand from regional markets. The average export price for the full year reached US$1,701 per tonne, up sharply from US$1,350 per tonne in 2023.

Exports to China, Vietnam’s largest rubber market, highlight the pace of this increase. The average export price rose steadily from US$1,388 per tonne in January 2024 to US$1,905 per tonne by November, marking a 40 percent year-on-year rise compared to November 2023. Over the first 11 months of 2024, the average export price to China stood at US$1,653 per , representing a 25 percent increase year-on-year.

Major export destinations

China remains Vietnam’s primary export destination, accounting for 72 percent of the volume and 71 percent of the value in 2024. Geographical proximity, integrated regional sourcing arrangements, and China’s extensive downstream tyre and industrial sectors explain this weight. Secondary markets include India, South Korea, and direct shipments to Europe and the US for specialized or processed grades.

The heavy dependence of Vietnam’s rubber exports creates exposure to China’s demand cycles and policy shifts. Consequently, diversifying into India, Korea, and premium European markets is a logical priority for processors and policymakers.

In fact, Vietnam’s rubber export diversification is accelerating, with rising shipments of processed rubber goods to the EU and ASEAN markets in recent years. Growth is particularly evident in furniture components, industrial belts, and specialty rubber products.

However, the industry faces structural headwinds, as global rubber markets struggle with softening demand and persistent oversupply. These pressures have narrowed margins and increased inventory risks for exporters.

In this environment, export performance increasingly depends on a mix of volume, pricing, and quality or certification premiums, rather than scale alone.

Value-added opportunities

Vietnam’s rubber export diversification is gaining traction, with processed rubber goods increasingly shipped to the EU and ASEAN markets. Growth is most visible in furniture components, industrial belts, and specialty rubber products.

Yet the sector faces structural headwinds as global rubber stocks contend with both softening demand and persistent oversupply, which are factors that have narrowed margins and heightened inventory risk for exporters. Revenue growth now depends on a balanced mix of volume, pricing, and quality or certification premiums, rather than scale alone.

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At the same time, new demand segments are emerging:

• The global medical glove industry, centered in Malaysia but sourcing latex worldwide, continues to support demand for specific latex grades.
• The ongoing electrification of transport (EVs) is also expected to spur long-term demand for tyres and rubber components, especially if Vietnam develops stronger compounding and specialty rubber capabilities.
• Processed rubber goods also present new entry points into Africa and Latin America, where industrialization and infrastructure growth are driving rubber consumption.

The commercial case for moving up the value chain is clear. Semi-processed and finished rubber products capture higher margins and mitigate exposure to commodity price volatility. Additionally, regional trade frameworks such as RCEP and ASEAN further enable supply-chain integration, improving access to neighboring manufacturing bases.

However, domestic capacity in tyres, technical rubber goods, and conveyor or belt products is expanding, and technology gaps remain in advanced compounding and specialty formulations. Attracting targeted FDI into high-end processing and encouraging joint ventures that transfer technology and know-how will be key to unlocking Vietnam’s next phase of value capture.

Advantages and challenges

Below is a concise, precise table that summarizes the sector’s principal strengths and constraints, designed for readers for a quick, analytically useful snapshot.

Strategic outlook

Short-term

The sector should prioritise price stabilisation and export diversification. Practical measures include expanding guaranteed procurement contracts with processors, subsidised certification pilots for key exporters, and targeted market development in India and Korea. The government’s push toward the US$3.3 billion target can be supported by short-term trade facilitation and logistical improvements at ports.

In 2025, Vietnam’s rubber sector is riding favourable pricing and recovering demand. The average export price hit US$1,775 per tonne in the first eight months of 2025, marking a price environment that can cushion small volume dips.

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To leverage this, companies should:

• Prioritize securing supply chains that meet premium product quality standards;
• Strengthen contracts with buyers to lock in volumes, while taking advantage of high prices; and
• Ensure harvest and tapping practices are efficient, particularly by incentivizing smallholders to collaborate and adopt better agronomic practices.

Mid- and long-term

The medium horizon focuses on value addition and scaling up. This involves incentivizing investments in compounding, tire component plants, and medical-grade latex processing; promoting public-private replanting schemes to renew aged trees; and expanding traceability programs so that certified volumes are financially meaningful. Policy instruments, such as tax incentives, industrial land allocation, and co-financing for certification, will be essential.

Mid-term success will depend on:

• Scaling plantations (replanting) and improving yields, especially in high-potential provinces;
• Expanding processing and compounding capacity — especially for medical, automotive, and specialty industrial rubber; and
• Investing in sustainability certifications (FSC, PEFC) and ensuring traceability throughout the supply chain.

Looking toward the 2030s, Vietnam has the potential to reshape its rubber sector. As global demand strengthens, Vietnam should target higher-margin segments.

Outlook

Vietnam’s rubber industry leverages longstanding strengths but faces structural hurdles. For investors and industry stakeholders, the immediate prospects include opportunities in traceability systems, certified processing, and logistics improvements. Over the medium and long term, strategic investments in compounding plants, specialty rubber production, and green technology processing units could elevate Vietnam from a mere raw rubber exporter to a regional hub for high-quality, sustainable rubber products.

With clear public policies and focused private investment, Vietnam is in a strong position to convert its manufacturing capacity into higher-margin, more sustainable rubber industry growth industry.

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