2022 is the second year the rubber industry has recovered, overcoming many difficulties caused by market fluctuations, economic inflation, lack of working capital and exchange rate fluctuations, maintaining development, bringing motivation to people. rubber plantations, as well as Vietnamese rubber processing and exporting enterprises.
Slight growth in the face of many difficulties
According to statistics of Vietnam Customs, the export turnover of the whole rubber industry in 2022 is estimated at 3.31 billion USD, the output is 2.14 million tons, up 2.16% compared to 2021; in which, rubber products are estimated at 1.08 billion USD.
According to the Ministry of Agriculture and Rural Development, with the third position in the world in terms of export value, Vietnamese rubber has been present in more than 80 countries and territories around the world. At the same time, Vietnamese rubber is increasingly penetrating more and more important markets such as China, America, Europe, Korea, India...
In the first 6 months of 2022, the high price of rubber latex has boosted rubber export activities to develop strongly, making the rubber industry prosper after a year of recovery.
By the third quarter of 2022, the rubber industry still has significant growth; In which, the largest importer of Vietnamese rubber is the Chinese market, with 453,000 tons, worth USD 669.14 million, up 10.4% in volume and 0.5% in value over the same period last year. 2021, accounting for 70.2% of the country's total rubber export value.
The second is the Indian market, with 42,000 tons, worth US$69.64 million, up 25.1% in volume and 18.3% in value over the same period in 2021, accounting for 6.2% of the total. rubber export value of the country in the third quarter of 2022. However, in the last 3 months of 2022, world economic and political fluctuations have a direct impact on rubber import and export activities.
Besides, fluctuations in exchange rate along with domestic tax policies have unintentionally hindered the development of the rubber industry. According to Mr. Vo Hoang An, Vice President of the Vietnam Rubber Association, in the last 2 months of the year, Vietnam's rubber exports are still facing difficulties because the US dollar has entered a price appreciation cycle as a haven asset. hidden from inflation. Rubber was no exception when the price of latex dropped during the period when the US dollar rose strongly. Moreover, the problem that makes it difficult for businesses is that they will be refunded tax after exporting.
However, the waiting time for tax refund is too long, causing businesses to have a backlog of capital in taxes, some businesses have a backlog of hundreds of billions of dong, and there is no revolving capital for importing raw materials into factories, allocating production, processing, etc. meet the next export contract. This makes it expensive to pay interest on bank loans for the temporarily paid value-added tax capital, and also slows down export activities, bringing in a turnover that is not as expected.
Cooperation to balance raw materials
In the face of high fluctuations in the US dollar exchange rate, while the price of rubber latex dropped in the last 2 months of the year, the correlation between rubber production cost and selling price was unbalanced. Over the past 10 years, rubber plantation enterprises have gradually narrowed their area to switch to other crops, causing a decrease in the supply of raw materials for the factory.
According to Ms. Phan Thi Hong Van, Deputy General Secretary of the Vietnam Rubber Association, the rubber tree area in Vietnam is more than 938 thousand hectares, accounting for 7.2% of the total global rubber area. Vietnam's rubber latex harvest will reach 1.26 million tons in 2021, accounting for 8.7% of global rubber production. The average yield of Vietnamese rubber is 1,682 kg/ha, ranking first in Asia. In this total rubber area, Dai Dien rubber (mainly of state rubber companies) reached 455,000 ha, equivalent to nearly 48% of the total rubber area of the country. The rest 477,000 ha, or 52%, is rubber owned by households, also known as smallholder rubber.
This means that rubber processing and exporting enterprises are currently short of raw materials, while smallholder rubber accounts for a larger share of rubber production. Thus, the problem posed for the development of the whole industry in the face of fluctuations in the US dollar exchange rate, falling rubber prices and the supply of raw materials for the rubber industry is the link between large-scale rubber and small-scale rubber.
Citing data from the General Department of Customs in 2020, 2021, Mr. To Xuan Phuc, Forest Trends Specialist (PanNature's partner organization in research, analysis and communication activities on forestry policy in Vietnam) Nam) shared that in 2021, Vietnam will import about 1.6 million tons of natural rubber with a value of $1.9 billion. These figures increase by 2.4 times and 2.7 times respectively compared to the figures in terms of import volume and turnover of 2020.
In 2022, the source of imported materials is similar. Thereby, Vietnam has imported a large amount of natural rubber from abroad. Moreover, in recent years, the market's demand for sustainable natural rubber poses a big challenge for rubber producers, which is the need to improve management, production, and technology application methods. transparent traceability and reduced costs to increase competitiveness in a period of low prices that threaten to linger for years to come.
Before the current market's requirements for sustainable rubber development, the problem is to make the source of raw materials from smallholder rubber legal, with FSC certificate (certificate of sustainable forest management by the Association of Southeast Asian Nations). World Forest Management Council); so that businesses do not have to find raw materials from outside, create close links with small rubber farmers, increase export value for Vietnamese rubber products.
However, in order for businesses and smallholder rubber farmers to create a connection and understand each other better in this connection, it is the smallholder rubber households that must improve their scientific and technical level in the care of the garden. trees and other latex extraction are limited. There have been many affiliated enterprises signed offtake contracts to purchase products from smallholder rubber growers. However, these links are currently very loose and unsustainable.
Explaining this dilemma, a representative of Lien Anh Rubber Production Co., Ltd. shared that most of the small rubber farmers have an area of less than 3 hectares, the number of households with more than 10 hectares accounts for less than 1.5. %. Most of the current rubber latex consumption transactions still have to go through intermediary traders, farmers easily break their commitments and sell latex to other buyers.
Therefore, the Ministry of Agriculture and Rural Development as well as the authorities in the agricultural sector need to have a mechanism to support the development of linkages between smallholder households and stakeholders in the direction of transparency, reducing intermediaries. , ensuring fair, legal, clear origin. Only in this way can rubber processing and exporting enterprises firmly overcome the difficulties of the world market, bringing the rubber industry to development after 2 years of recovery.
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