VIETNAM RUBBER TRADE DEFICIT IN FIRST QUARTER OF 2021

To meet the needs of production and processing, Vietnam still has to import a large amount of rubber.

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VIETNAM RUBBER TRADE DEFICIT IN FIRST QUARTER OF 2021

To meet the needs of production and processing, Vietnam still has to import a large amount of rubber.

According to the General Department of Customs, Vietnam's rubber export in the first quarter of 2021 reached 406.5 thousand tons, worth the US $ 674.7 million, increasing by 77.4% in volume and 102.4% in value over the same period in 2020.

In contrast, rubber imports in the first quarter of 2021 reached 504.94 thousand tons, worth $ 691 million, up 176.9% in volume and 136.9% in value compared to the first quarter of 2021.

With the volume difference of nearly 100 thousand tons, this is the first time in 10 years that Vietnam's rubber industry imports more than it exports.

Most of the raw rubber is imported for re-export and partly to meet the needs of domestic manufacturers.

According to the Vietnam Rubber Association (VRA), up to now, the country's rubber area has reached nearly 1 million hectares, with nearly 70% of which is the area for latex collection with an output of about 1.1 million tons/year.

Vietnam is the 3rd largest natural rubber exporter in the world. Each year, about 80% of natural rubber from Vietnam, including imports from Cambodia and Laos is exported.

China is the largest market, accounting for a 60% market share in the total amount of rubber exported from Vietnam. Other markets, with much smaller amounts, include India, Malaysia ...

Approximately 20% of the total supply, including imported raw materials, is deeply processed in Vietnam, with the main output products including tires, automotive components, shoe soles, sports products, and other products. These products are used for the domestic market and export.

According to enterprises in the industry, currently domestic natural rubber produces only household products and products that are not subjected to high temperatures or in contact with lubricants.

Meanwhile, to produce industrial products that require heat resistance, resistance in different environments, synthetic rubber (technical rubber) must be used. At present, this type of rubber cannot be invested in production in the country, although the market demand is very large.

Therefore, the rubber industry still has a paradox that exports a lot with low value but increases the import of rubber for deep processing.

The rubber processing industry focuses on the production of tires, technical components, gloves, elastic fibers, and has not yet produced synthetic rubber, so all of them have to be imported. For high-tech rubber products, which require investment in modern technology, there are few enterprises with sufficient financial resources to invest.

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The amount of rubber imported from Cambodia surged in the first quarter of 2021

Data of the General Department of Customs showed that in the first quarter of 2021, Cambodia was the largest rubber supplier market for Vietnam with a volume of 312 thousand tons, an increase of more than 10 times compared to the same period in 2020.

Notably, the volume of rubber imported from this market accounted for 61.8% of the total volume of rubber imported into Vietnam in the first quarter of 2021, a sharp increase compared to the 15.4% of market share of the same period in 2021.

The average import price of rubber of Vietnam from the Cambodian market in the first quarter of 2021 reached 1,021 USD / ton, a slight decrease of 0.8% compared to the same period in 2020. At the same time, this price was much lower than the price. importing rubber from other markets such as Korea (2,051 USD / ton), China (2,231 USD / ton), Japan (2,544 USD / ton)

In the first quarter of 2021, the amount of rubber imported from other markets such as Laos, China, Taiwan, and Thailand ... also increased sharply over the same period in 2020.

Over the past time, Vietnamese businesses have grown and developed a considerable amount of rubber trees in Laos and Cambodia. By the end of 2020, the total area managed by members of the Vietnam Rubber Industry Group (VRG) in Cambodia is 87,891 hectares; in which, the business area is 61,153 ha, the basic construction is 26,732 ha.

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