Vietnam: Rubber exports have bright future

Vietnam: Rubber exports have bright future
August 22, 2011





Worker in a tire factory (Photo: SGGP)
The new factory, built at an investment of VND3,000 billion (US$146 million), is expected to roll out 600,000 tires per annum.

At present, the two most advanced tire factories in Vietnam are the Rubber Factory in Danang (DRC) and the Southern Rubber Company (Casumina).

According to Casumina, the industry in Vietnam has an edge on the market as Japan, Europe and USA are losing their market share due to a continuous increase in the cost of ra
w materials.

This is a great opportunity for Asian countries, and Vietnam in particular, as it is the fifth highest producer of raw material in the world.

The country can gain an advantageous foothold in producing and exporting car tires, truck tires, medical gloves and high-quality mattresses.

Recently, the government approved a project to expand the area for rubber plantation to 800,000 hectares by 2015 with more expansion expected by 2020.

The industry will acquire another 60,000 hectares in the North West and the Central Coastal regions of the country with a view to increase rubber exports by $5-10 billion in the future.






Malaysia: Rebounding rubber
August 22, 2011





MORE than 42,000 small farmers will receive a Hari Raya bonanza from the Rubber Industry Smallholders Development Authority (Risda). Indeed, of late, tapping rubber, which is usually associated with eking a bare existence, has been a godsend because rubber prices have stayed at high levels. At the beginning of the year, the price of SMR20 reached RM16.70 per kg. Of course, most of the rubber produced by the mainstay of the industry, the smallholders, is latex, cuplump or scrap rather than this tyre-grade rubber. Nevertheless, even at the invariably lower farm gate prices for the raw rubber, a small rubber planter with two hectares, the average size, producing 1,500 kilos of latex, the average output, would be able to receive a monthly income in excess of RM2,000.

This is a far cry from the situation some 10 years ago when prices were so low and incomes so meagre that cash assistance had to be provided to tide them over and exit schemes crafted to get them out of the rubber industry and into more rewarding sectors. Indeed, with the recovery in prices, the local rubber industry, which has long lost its position as the leading world producer, has bounced back strongly. Last year, production rose to 970,000 tons from 857,000 tons in 2009, and earned the country RM33 billion in revenue compared with RM25 billion the previous year. The number of small rubber planters has also increased from about 200,000 in 2002 to some 265,000 in 2009, reflecting the revived buoyancy of the industry.

But as the decline in rubber prices for the third straight week, and the sharp falls in oil prices, remind us, commodities are susceptible to fluctuations. True, as prices are expected to still remain stable and strong in the short-term, rubber smallholders should be able to continue enjoying lucrative incomes. But there is no guarantee that this streak will continue. Certainly, the recent peaks in prices do not provide a short-term incentive for smallholders to heed the prime minister’s advice to use the latest planting methods and tapping technologies. On the contrary, there is a tendency to overtap the trees to benefit from the price hikes. Chopping down the old trees and replanting them with higher yielding clones is also not on their minds. But without a doubt, in the long run, as the prime minister rightly said, new models and action plans are needed to address the technological and structural problems that persistently put smallholder incomes at the mercy of the volatility in world prices.




Spot rubber improves on short covering


KOTTAYAM, AUG. 22:
Spot rubber turned better on Monday. The market opened steady but improved later on fresh buying and short covering led by the moderate recovery in domestic futures. “We are expecting enquiries from major consuming sector as the international indices rule much above the Indian rates,” an observer said. The trend was partially mixed.

Meanwhile, in the international market natural rubber prices were seen rising with TOCOM rubber futures tracking the gains in other commodities.

Sheet rubber increased to Rs 198.50 (197.50) a kg, according to traders. The grade finished unchanged at Rs 198 a kg both at Kottayam and Kochi, according to the Rubber Board.

In futures, the September series recovered sharply to Rs 204.40 (198.61), October to Rs 201.90 (195.46), November to Rs 201.33 (195.52), December to Rs 201.90 (197.20), January to Rs 203 (198.09) and February to Rs 203 (209.95) a kg on the National Multi Commodity Exchange.

RSS 3 improved at its August futures to ¥351 (Rs 209.09) from ¥348 a kg during the day session but then slipped to ¥350 (Rs 208.48) in the night session on the Tokyo Commodity Exchange. RSS 3 (spot) closed at Rs 211.12 (211.07) a kg at Bangkok.

Spot rates were (Rs/kg): RSS-4: 198.50 (197.50); RSS-5: 190 (190); ungraded: 182 (180); ISNR 20: 195 (194) and latex 60 per cent: 129 (129).