Rubber exports plummet
Viet Nam's rubber exports fell in May due to changing Chinese policies and fears over the US-China trade war, a representative of the Viet Nam Rubber Group (VRG) has said.
According to the Ministry of Industry and Trade, in May, rubber exports reached 80,000 tonnes, worth US$116 million, up 6 per cent in volume and 7 per cent in value compared with April. However, those figures were down 26.5 per cent in volume and 26.2 per cent in value year-on-year.
Fortunately, in the first five months of the year, rubber exports reached 495,000 tonnes, worth $673 million, up nearly 12 per cent in volume and 4 per cent in value year on year.
The reduction in May’s export value was due to China’s increase of import tariffs for mixture rubber to 10 per cent, Duong Tuan Anh, deputy head of VRG’s Market Department, told bizlive.vn.
Mixture rubber shipped to China made up half of rubber export volume from Viet Nam in the first four months of this year.
The trade war was also encouraging manufacturers and traders to be cautious over the movements of the global rubber market, especially with the G20 conference in Japan coming at the end of June, Tuan Anh said.
The prolonged trade war would affect agricultural exports and rubber exports in particular because China is the largest export market of Viet Nam’s rubber, accounting for more than 60 per cent of total rubber exports, he said.
Meanwhile, the US increased taxes from 10 per cent to 25 per cent for some rubber products imported from China, including rubber latex, conveyor belts, pneumatic tires, gloves and gaskets from May 10. The China Automobile Manufacturers Association said the US tax policy could have a big impact on the country's auto parts exports. That could lead to reduction in rubber imports from Viet Nam for production of auto parts.
However, the trade war could attract investment to Viet Nam’s rubber industry as firms moved rubber product factories from China to Viet Nam to avoid the US tariffs, he said.
Besides those factors, the prolonged hot weather in Viet Nam, Thailand and China had slowed rubber output, especially in May - the first month of the new harvest season.
However, according to the Association of Natural Rubber Producing Countries (ANRPC), in 2019, supply of rubber would continue to exceed demand with supply of 14.5 million tonnes, including an inventory of 2.9 million tonnes from 2018, with demand of 14.4 million tonnes, Tuan Anh said.
He noted that the Viet Nam Rubber Group had managed nearly 420,000 hectares of rubber in three countries, Viet Nam, Laos and Cambodia with total annual consumption of about 400,000 tonnes.