Low Latex Prices Boost Vietnam’s Rubber Exports
By the end of May 2015, the average selling price of rubber in Vietnam was US$1,442 per ton, down from over US$2,000 per ton in early 2014. Prices have been averaging under US$1,500 per ton since October 2014. Compared to exports in April 2015, exports in May rose 53.3 percent in volume and 57.2 percent in value. In May, low prices spurred Vietnam on to export 80,485 tons of natural latex, reaching a total of 330,059 for the first five months of 2015. In May, synthetic rubber exports reached 38,145 tons.
In 2015, much of Vietnam’s rubber exports have gone to neighboring China and Malaysia, which had imported 160,430 and 54,244 tons of Vietnamese rubber respectively in the first five months of the year.
According to Vietnam’s Ministry of Agriculture and Rural Development (MARD), in 2014, Vietnam’s two biggest latex importers, including China and Malaysia, imported 43.5 percent and 19.4 percent of Vietnam’s total export respectively, minor drops of 3.4 percent and 8.5 percent respectively from 2013 levels. Vietnam’s latex exports to other core markets, such as India, German and Korea, also dropped over the course of the year. In contrast, exports to Sri Lanka, Turkey, and the U.S. quadrupled in 2014.
In response to the falling latex price, the Vietnam Rubber Association (VRA) had advised its members not to supply latex at any price lower than US$1,500 per ton, with an aim to stop the plunge. In the recent notice sent to International Rubber Consortium (IRCo), VRA has mentioned its members and Vietnamese farmers struggling with the low prices. In response to this, Thailand, Malaysia and Indonesia – the top three nations exporting 70 percent of the world’s rubber – intend to restrict supply in order to to help raise the price of the substance.
Vietnam’s Agriculture Minister Cao Duc Phat met recently with his Thai counterpart Petipong Pungbun na Ayudhya to discuss how to improve the rubber prices in the near future and how to work together with the International Tripartite Rubber Council (ITRC) and International Rubber Consortium (IRCo) to stabilize the rubber’s price.
Vietnam’s Ministry of Finance brought in tax incentives in 2014 granting some rubber products zero export tax, a decrease from the previous one percent tax. These products include balata, natural rubber, and synthetic rubber.
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