2010 will be a prosperous year for rubber producers

02:08 PM @ Tuesday - 06 April, 2010
Vietnamese rubber producers and exporters have put high hopes in 2010 which they believe will bring prosperity with price expected to increase by 30 percent.

The Vietnam Rubber Association, said that it expects to export 750,000 tonnes of rubber in 2010 and reap $1.5 billion in export revenue thanks to a 30 percent price increase.

International rubber research institutes all forecast that demand for natural rubber will increase steadily from 2010 until 2019. In 2010 alone, natural rubber consumption in the world would be some 10.43 million tonnes, an increase of eight percent over 2009. Meanwhile, the natural rubber output of Thailand, Indonesia and Malaysia, which provide 70 percent of the total output will decrease as a result of El-Nino.

In Vietnam, the natural rubber price is staying at a two-year high at $2,900 per tonne. It is expected to continue the upward trend at least until the end of the second quarter of 2010. China, the main rubber importer of Vietnam, has slashed import tariffs on rubber, which has encouraged Chinese enterprises to import more rubber.

The association of South East Asian rubber production countries with four key members Vietnam, Thailand, Indonesia and Malaysia which export 1.3 million tonnes of rubber per annum, has agreed that if the rubber price in the world is too low, the association’s members will consider reducing the exports and buying back rubber latex in the world market in order to prevent the prices from sliding.

Vietnamese producers say they are trying to seek opportunities overseas. The Vietnam Rubber Group (VRG), which has 27 members and develops 155,000 hectares of rubber, churning out 330,000 tonnes of latex per annum, has said that it will make outward investment to develop rubber growing areas. The group plans to have 100,000 hectares of rubber by 2012 in Cambodia, Laos and Myanmar, while considering making investments in South Africa as well.

The development of 100,000 hectares of rubber overseas is within reach, according to VRG. It has obtained an agreement to lease land for growing rubber at a low price of $7 per hectare per annum for 70 years in Cambodia (10,000 hectares were grown in 2009), $30-50 per hectare in Laos (21,000 hectares were grown in 2009). The group is negotiating with Myanmar on the price of land leasing.

The Ha Tinh Rubber Company has recently received an investment license for the rubber growing project on the area of 600 hectares in Cambodia

The Saigon Investment Group (SGI) has been pushing investment in Laos and Cambodia for the last two years. SGI’s Chairman Dang Thanh Tam said that rubber will be the focus for the group in the time to come, because natural rubber is considered an irreplaceable material

Hoang Anh Quang Minh Company also plans to grow 5,200 hectares of rubber in Laos, saying that 2,500 hectares were grown in 2009.

Experts say Vietnamese enterprises are trying to develop rubber area in Laos and Cambodia because the land there is suitable for rubber plants which allow them to bring a high yield of two tonnes of latex per hectare, which is equal to the eastern areas of the southern region. Meanwhile, rubber growers are facing difficulties in the procedures relating to land allocation in the central region and central highlands.

VietNamNet Bridge