Market and product

Le Quang Thung, the chairman of the Vietnam Rubber Association and the chairman of the Management Board of the Vietnam Rubber Group, said that Vietnam took fifth place in the world in rubber growing area and fourth place in natural rubber production. Vietnamese rubber products have been shipped to 39 countries, of which China accounts for 60 percent.

Rubber exports were 782,200 tonnes and a little more than US$2.3 billion in 2010, reaching a record high by that time. The average price of Vietnamese export rubber in the first five months of this year stood at US$4,383 per tonne, 1.6 times higher than in the same months in 2010, putting rubber in the second place among Vietnamese agricultural exports. It is predicted that the world demand for rubber and the price of rubber will increase rapidly in the near future. For this reason, it is expected that Vietnamese rubber exports will amount to 830,000 tonnes (about 50,000 tonnes more than in 2010) and a little more than US$3 billion in 2011.

Despite the increase in price and production, Vietnamese rubber products have not really established a niche on the global market since the quality of product is unstable, particularly that of rubber made in small plantations. Given the rush for rubber trade via border crossings, Vietnamese businesses have competed for quantity, rather than quality of rubber. Actually, rubber production businesses have just focused on export, while at the same time many domestic enterprises have had to import foreign materials for production of rubber products.

Le Quang Thung said that to rectify the situation, competent agencies need to strengthen coordination in management of rubber production/export to avoid bad quality of Vietnamese export rubber. In addition, they need cooperation in the rubber sector, among rubber businesses and with state agencies to improve the quality of Vietnamese rubber. The state needs to plan the rubber sector and build rubber factories in rubber growing areas.

To facilitate rubber development, Prime Minister Nguyen Tan Dung has announced Decision 750/QD-TTg, regarding rubber development planning until 2015, with a vision to 2050. Following the plan, there would be 800,000ha of rubber yielding 1.2 million tonnes of rubber latex in 2015. For this to happen, the Vietnam Rubber Group is planting new rubber areas and getting together with Laos and Cambodia to expand the rubber growing area. In the short term, following the plan for this year, the group will try to (1) plant 65,000ha of new rubber mostly in the northwest of Vietnam, Laos and Cambodia, (2) seek varieties suited to each and every region and produce rubber in form of joint venture or shares with farmers. In addition, the group will enlarge rubber areas in the provinces of Binh Phuoc, Dong Nai, Tay Ninh, Ba Ria - Vung Tau and more that take advantage in growing and developing rubber.

The International Rubber Study Group (IRSG) predicted that the world would need 26.1 million tonnes of rubber (both natural and synthetic) this year, a 1.7 million tonnes more than in 2010. World rubber sales will likely be 25.5 million tonnes in 2011 and 27.5 million tonnes in 2012. Of this, the demand for synthetic rubber will increase 8.6 percent in 2011 and 6.4 percent in 2012, and that for natural rubber will increase 4.6 percent and 3.8 percent, respectively./.