Will rubber exports to major markets continue to increase?

illustration image. Source: Interret

According to the Import-Export Department (Ministry of Industry and Trade), in February 2022, rubber prices in Japan and Thailand increased sharply, while prices in Shanghai (China) decreased.

Notably, the price of Japanese rubber skyrocketed to the highest level in the last eight months due to strong oil prices, while rain in Thailand raised concerns about supply shortages.

The Association of Natural Rubber Producing Countries (ANRPC) estimated that the global rubber output in 2022 will reach about 14.55 million tons, with consumption at 14.39-14.82 million tons. Rubber consumption is forecast to increase by 25%, so the output in 2022 may be less than the demand.

The factors supporting rubber prices in 2022 include weather conditions and the Covid-19 pandemic, causing an increase in demand for rubber gloves and personal protective clothing.

Meanwhile, the challenges that could affect rubber demand include a lack of semiconductors (which could affect auto production), container shortages, high transport costs and slow cargo clearance might affect the supply chain.

In the domestic market, in mid-February 2022, the domestic price of raw rubber latex did not fluctuate much. In Binh Phuoc, the price of raw rubber latex purchased by Phu Rieng Rubber Company ranged from VND330-340/TSC which was stable compared to the previous 10 days.

In Binh Duong, the purchasing price of raw rubber latex of Phuoc Hoa Rubber Company fluctuated at VND348-350/TSC. Gia Lai rubber latex is purchased by Mang Yang Rubber Company for VND310-320/TSC.

According to statistics of the General Department of Vietnam Customs, in January 2022, Vietnam exported 192,720 tons of rubber, worth US$331.12 million, up 1.7% in volume and 8.6% in value compared to the same period last year. The average export price of rubber in January 2022 was at US$1,718/ton, up 6.8% compared to January 2021.

China is still Vietnam's largest rubber export market in the first month of this year, accounting for 74.3% of the country's total rubber exports, reaching 143,240 tons, worth US$243.81 million, up 0.9% in volume and 10.1% in value over the same period last year.

The average price of Vietnam's rubber exports to China in January 2022 was at US$1,702/ton, up 9.1% compared to January 2021.

"It is forecast that this year, Vietnam's rubber exports to major markets will continue to increase, especially China will still be the largest rubber export market of Vietnam," said a representative of the Import-Export Department.