Vietnam’s rubber industry thrives as 2024 export prices climb on strong demand
Vietnam’s rubber industry thrives as 2024 export prices climb on strong demand
Vietnam’s rubber exports surged in value in 2024, reaching US$3.4 billion, an 18-percent year-on-year increase, despite a 6-percent drop in export volume to two million tonnes, according to Vietnam Customs.
A worker harvests latex from a rubber tree in Vietnam. |
The rise was primarily driven by higher global prices.
Of the total export earnings, $1.2 billion came from rubber products, marking a 13-percent jump compared to the previous year.
Meanwhile, 1.9 million tonnes of rubber worth $3 billion was imported, resulting in a $400 million trade surplus.
Rising prices offset decline in export volume
Le Thanh Hung, chairman of the Vietnam Rubber Association (VRA), attributed the increase in export value to a significant rise in rubber prices.
The average export price reached $1,701 per tonne in 2024, up from $1,350 per tonne in 2023. This price surge helped offset the decline in volume.
According to the Association of Natural Rubber Producing Countries, global natural rubber production in 2024 was 11.2 million tonnes, while demand reached 12.1 million tonnes, leading to a 900,000-tonne supply deficit.
Strong demand, global supply shortage keep prices high
Nguyen Duc Dung, deputy general director of the Mercantile Exchange of Vietnam, noted that rubber prices remained high in late 2024 due to tight global supply and rising demand.
Production declined in major rubber-producing nations, while demand continued to climb, particularly in China – the world’s largest rubber importer.
China’s expansionary monetary and fiscal policies spurred economic recovery, increasing rubber consumption in industries such as automobile manufacturing and industrial equipment production.
Positive outlook for 2025
The VRA predicts further growth in 2025, with rubber exports expected to exceed $11 billion, a 10-perent spike from 2024.
The industry is expected to capitalize on environmentally friendly and recycled materials to enhance its long-term value.
Rubber prices in early 2025 will depend largely on China’s economic policies, particularly its investments in industrial projects, car tire manufacturing, and equipment production.
Sustained demand from China and other Southeast Asian countries, along with the global economic recovery, is likely to support Vietnam’s rubber export growth in the short term, Dung added.
