Rubber exports skyrocketing but worried because of reliance on China

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Illustrative Photo: Internet

In 10 days amid April, the price of rubber traded on Asian exchanges continued to decrease due to the outbreak of Covid-19, affecting investors' psychology, the Import and Export Department (Ministry of Industry and Trade) said.

The global rubber supply has been affected due to lack of shipping containers.

In March, China's rubber imports hit a record in the last four years thanks to a strong economic recovery. China's natural and synthetic rubber imports in March reached 711,000tonnes, worth US$1.25 billion, up 17.9% in volume and 40% in volume in value from March last year, according to China Customs,

In the first three months of 2021, China imported 1.79 million tonnes of rubber, worth $3.05 billion, up 8% in volume and 22.8% in value from the same period in 2020.

Regarding rubber exports, Vietnam in the first three months of 2021 exported 406,470 tonnes, valued at $674.66 million, up 77.4% in volume and up to 102.4% in value fromthe same period in 2020, according to the latest statistics of Vietnam Customs,

In particular, Vietnam exported to China 290,160 tonnes of rubber, worth $463.07 million, up 103.1% in volume and 128% in value year-on-year.

Vice President and General Secretary of the Vietnam Rubber Association, Vo Hoang An, said China is known as the world's factory, so not only Vietnam but almost the entire world depends on the market.

In recent years, Vietnam's rubber industry has been making efforts to seek other markets, towards more "fastidious" markets like Europe, the US and Japan.

However, due to the effects of the Covid-19 pandemic in host countries, orders from these markets in 2020 and early 2021 have been insignificant. Meanwhile, the demand for natural rubber is increasing in China thanks to effective disease control measures.

The recent report by Forest Trends in collaboration with the Vietnam Rubber Research Institute and Vietnam Rubber Association provide very notable information in Vietnam's "white gold" export.

Although the exports of high value-added products are increasing, the exports of natural rubber raw materials is still high, accounting for nearly a third of the total export turnover of the whole industry. There is no signal showing that export price and turnover of natural rubber will fall.

In addition, although the products of the rubber industry, especially natural rubber, are mainly sold in China - the market currently does not have strict requirements in terms of quality and legality as well as origin, but many recent signals show the requirements of export markets have been changing rapidly, even China.

The Chinese government's requirements for environmental and social aspects for products imported into the country are increasingly stricter. In more fastidious markets such as the US, EU, Japan and South Korea, the legality and sustainability requirements for products are getting stricter in terms ofthemanagement and market perspective.

Vietnam has a trade deficit of over US$1 billion in the first half of April VCN - Imports increased sharply, making the trade deficit more than US$1 billion in the first half ...

Some agricultural experts have said that to meet the requirements of markets, the rubber industry should aim to achieve sustainable rubber production according to the Forest Stewardship Council (FSC) standards. The reason is these standards are accepted by many markets and customers, that can bring the highest added value to a product and best meetenvironmental and social requirements.