JUST REOPENED, CHINA HAS COLLECTED 99% OF A TYPE OF FOREST PRODUCT FROM VIETNAM

Global rubber production is forecast to be in short supply, which is an important factor driving the upward momentum for rubber prices right in the second quarter of 2023. This is a favorable condition for rubber exporting countries like Vietnam.

JUST REOPENED, CHINA HAS COLLECTED 99% OF A TYPE OF FOREST PRODUCT FROM VIETNAM

Global rubber production is forecast to be in short supply, which is an important factor driving the upward momentum for rubber prices right in the second quarter of 2023. This is a favorable condition for rubber exporting countries like Vietnam.

Rubber prices will increase in the second quarter of 2023

According to the report of the Import-Export Department (Ministry of Industry and Trade), in the first quarter of 2023, the price of raw rubber throughout the country did not fluctuate much. The domestic rubber price movement is in the same direction with the world price trend, however, the price trend is much weaker than the price listed on major commodity exchanges in the world.

In April 2023, the price of raw rubber latex in the whole country did not change. In which, the price of latex in Binh Phuoc and Dong Nai is kept at 270-280 VND/degree of latex; in Dak Lak, Phu Yen, and Quang Tri traded at 250 VND/degree of latex; In other raw materials areas, the price of rubber was recorded in the range of 225 - 240 VND/grade of latex.

In the first quarter of 2023, rubber prices at key exchanges in Asia fluctuated strongly. After a strong increase in January 2023, rubber prices tended to decrease again until the end of the first quarter of 2023 due to uncertainties in the global financial market.

The banking crises in the US and EU have cast a shadow on the global economic outlook, raising concerns that the demand for rubber in production and consumption will decrease, putting pressure on product prices.

In addition, production activities in major rubber consuming countries such as China and Japan have not really recovered, making the trend of rubber prices in the market unstable. By the second half of April 2023, rubber prices at key exchanges in Asia tended to recover slightly due to concerns about supply shortages.

 According to the Association of Natural Rubber Producing Countries (ANRPC), in 2023, global natural rubber production is forecast to reach about 14,916 million tons, and consumption is expected to reach 14,912 million tons. The data all show that the balance of supply - demand in the world rubber market is likely to be tilted in favor of a supply shortage.

According to the Import-Export Department, this will be an important factor to boost rubber prices right in the second quarter of 2023. However, in the current context, the world economy still needs more time to stabilize after the shock of the banking industry in March 2023. In addition, manufacturing activity in China has not really recovered as expected. Therefore, in general, world rubber prices will face certain pressures.

Rubber exports to China will increase

According to the Import-Export Department, in the first quarter of 2023, rubber exports faced many difficulties when the selling price and output both declined due to high inflation and low demand.

According to statistics of the General Department of Customs, in the first quarter of 2023, Vietnam's rubber exports reached 381,780 tons, worth 531.3 million USD, down 6.1% in volume and 25.7% in value compared with the same period in 2022.

Regarding the export market, in the first quarter of 2023, Vietnam's rubber was mainly exported to the Asian region, accounting for 90.35% of the country's total rubber export value.

In the first quarter of 2023, China is still the largest market for Vietnam's rubber consumption with 292,610 tons, worth 397 million USD, up 4.4% in volume, but down 17.8% in value compared to the previous quarter. It’s similar to period in 2022, accounting for 76.64% in volume and 74.72% in value in total rubber exports of the country.

In second place is exports to India with 17,320 tons, worth 24.73 million USD, down 39.8% in volume and 52.9% in value over the same period in 2022, accounting for 4.54% in terms of volume and accounted for 4.66% in value of the country's total rubber exports.

In terms of export categories, in the first quarter of 2023, the mixture of natural rubber and synthetic rubber was the most exported product, accounting for 67.19% in volume and 67.19% in value in total of rubber exports of the whole country, with 259,470 tons, worth 357 million USD, up 3.4% in volume, but down 18.4% in value over the same period in 2022. In which, exports to China accounting for 99.76% of the country's total export of natural and synthetic rubber mixtures, with 258,850 tons, worth $355.77 million.

Currently, China is the world's largest rubber importer, accounting for 22% of the global market share. According to data from the Chinese Customs Administration, in the first quarter of 2023, China imported 2.09 million tons of rubber, worth $3.1 billion, up 9.5% in volume, but down 13.5%. 4% in value over the same period in 2022, due to a sharp drop in rubber prices.

In which, China's rubber imports from Vietnam reached 416,520 tons, worth US$562.66 million, up 15.2% in volume, but down 9.5% in value over the same period in 2022.

Vietnam's rubber market share accounted for 18.11% of China's total import value, up from 17.34% in the same period in 2022.

"The opening of China will boost the country's rubber consumption demand, creating conditions for Vietnam to boost exports," the Import-Export Department said.