"ZERO COVID VARIABLE" AFFECTS RUBBER EXPORTS

By the end of April, China was still Vietnam's largest rubber consumption market, accounting for nearly 70% of the country's total rubber exports. However, the Zero COVID policy is detrimental to Vietnam's rubber exports.

Specifically, rubber exports to China reached 46 thousand tons in April, equivalent to 79 million USD, down 35% in volume and value compared to March.

Accumulating 4 months, Vietnam exported 326 thousand tons of rubber to China, equivalent to 562 million USD, unchanged in production and up 8.5% in value over the same period in 2021.

(Data: General Department of Customs, Chart: Hoang Anh)

The Import and Export Department informed that rubber prices at the Shanghai Commodity Futures Exchange (SHFE) dropped sharply after the holiday.

On May 9, the price of RSS3 rubber for June delivery was at 12,270 yuan/ton ($1.82/kg), down 3.8% compared to the end of April and down 14% over the same period in 2021.

The reason is that China has blocked many provinces and cities to prevent the COVID-19 epidemic, causing the consumption of tires to slow down, and affecting the demand for rubber.

VRA believes that supply chain disruptions due to China's Zero COVID policy will affect rubber exports in 2022. While, rubber products are mostly exported to China by sea, so factors related to maritime transportation may affect Vietnam's natural rubber exports.

Photo: Illustrated

Currently, China is still tightening anti-epidemic measures, blocking major cities. That is likely to affect production and consumption activities for rubber products, impacting the demand for natural rubber worldwide in general and Vietnam in particular.