Way too much supply deflating natural rubber market
VOV.VN - The global natural rubber market is currently starting its fifth year of surplus that is creating excessive stockpiles of inventory and contributing to a steady fall in prices, says the Vietnam Rubber Association.
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An noted Vietnam natural rubber exports for 2016 surpassed expectations jumping 10.6% in volume to 1.26 million tons and 9% in value to US$1.67 billion when compared against 2015.
On the downside, however, the average price for rubber fell 6.3% to US$1,290 per ton over the course of the year.
Vietnam was the fourth largest exporter of natural rubber, he said, primarily shipping product to China and Malaysia who collectively account for roughly two-thirds ofthe country’s rubber exports.
However, he was less optimistic about the outlook for 2017.
The world demand for rubber, he pointed out, is primarily used to manufacture tires, and the looming economic slowdown in China could potentially spill over and slow the demand for natural rubber.
Asia accounts for 93% of the world rubber production, he added, noting that Thailand is the largest producer followed by Indonesia and then Vietnam, the third largest.
Other large rubber producers in the region include India, China and Malaysia.
China is the world's largest consumer of rubber followed by India and the US. Increasing consumption of tires and industrial rubber products in the US is expected to boost the global demand for rubber.
Tran Thi Thuy Hoa, head of the Vietnam Rubber Association’s advisory board has recently recommended the commodity not be sold at the current low prices.
Hoa pointed out that production had been cut by rubber growers in the last two months of 2016 and many smallholders are in the process of shifting production to other agricultural crops.
Meanwhile, Hoa urged Vietnamese rubber processors to invest more in advanced technology and seek out new buyers for their products.
She suggested that they plan on attending the Rubber and Tyre Vietnam, an international exhibition, to help them get up-to-date on the latest technologies and products and build new relationships.
To be held at the Saigon Exhibition and Convention Centre June 13-15 this year, it is anticipated that the exhibition will see more than 80 local and international participating exhibitors.
There will be conferences and seminars at the three-day exhibition, she noted, as well asa rubber sourcing fair to enable Vietnamese tire and rubber producers and foreign buyers to compare notes and explore business opportunities.
