By Dr. Tran Thi Thuy Hoa:
Badly hit by prolonged drop in natural rubber (NR) prices, Vietnam, the world’s third largest NR producer, plans to boost domestic consumption by promoting the manufacturing of rubber products such as tyres, gloves, automobile spare parts etc for both domestic and export markets
Globally, unprecedented price falls, adverse weather and growing usages of synthetic rubber are pushing traditional natural rubber growers to other agricultural commodities. The same trend is seen in Vietnam too. Rubber growers are increasingly switching to fruits trees, cashew and pepper. Some are doing inter-cropping and converting only a part of their rubber plantations.
Plunging natural rubber prices in recent years have slowed down new planting in Vietnam making it difficult for the country to achieve its full potential in natural rubber production in the near future.
Due to lower prices, new planting has been limited during the 2013–2018 period, and rubber growers are cutting down trees to get income from rubber wood to compensate their losses. This will seriously curtail natural rubber production in Vietnam.
Like other NR producing countries, Vietnam also is facing challenges of volatile prices and oversupply of natural rubber in the global markets. We recommend to the NR growers to apply some good agricultural practices such as inter-cropping of other agricultural crops to improve their income during low-price periods.
Top in productivity
Since 2013, Vietnam has been ranked the third in natural rubber production globally on account of the increase in cultivation area and productivity support. The country is ranked the first in average yield among natural rubber producing countries thanks to the efforts of the Rubber Research Institute of Vietnam (RRIV).
Actually, the country’s environmental conditions such as the long dry season, high wind and low temperature, are not much suitable for growing rubber, particularly in sub-optimal regions. To beat the natural hindrances, RRIV has been intensively developing clones which are adaptable to rubber growing areas in Vietnam and have high yield in latex and timbers.
Besides, RRIV also focuses on advanced techniques to improve the yield of the rubber trees. These include developing new clones every 3 years, rain guarding the rubber trees to avoid loss of field latex during rainy season, training the tappers tappers to upgrade their skills etc.
Boosting domestic consumption
Rubber is a key driver of Vietnam’s economy. Rubber occupies the fifth position in terms of Vietnam’s export turnover for agricultural products, after fruits, cashew nut, coffee and rice, and the ninth position in the country’s total export turnover (of all commodities put together). Rubber accounted for 2.8% of Vietnam’s total export turnover in 2017.
Vietnam exports around 80% of the natural rubber produced in the country and only 20% is consumed domestically. Vietnam has plan to increase local consumption to 30% and reduce exports of the raw material.
To boost domestic consumption, Vietnam plans to develop manufacturing of rubber products such as tyres, gloves, automobile spare parts, shoe soles, conveyor belts etc. for both the domestic and export markets.
Today, China is the largest export destination for Vietnam’s natural rubber, accounting for more than 60% of the country’s NR exports. However, the recent slowdown in China’s economy has led Vietnam to explore new export markets such as India, the US, Taiwan, Korea, Japan and the EU.
Drive to promote quality
The main issue with small rubber growers is that their natural rubber quality is not homogeneous. We encourage NR processors to help farmers to improve quality of rubber which will fetch them higher prices.
The Vietnam Rubber Association, along with other industry organizations, is taking various steps for the growth of the industry. Our Government and Vietnam Rubber Association, in association with Vietnam Rubber Group, the biggest state-owned company, and the Rubber Research Institute of Vietnam, have made great efforts to develop better latex-timber clones, increase yield, upgrade technology and skills, and improve quality for the overall development of the rubber economy.
We are also offering technical guidance to farmers, including smallholders, and promoting good agricultural practices through our websites. The Association also helps in improving the quality of natural rubber by upgrading the National Standards to be equivalent to international ISO standards and organizing training and study visits for growers and tappers.
Please note: This article is based on Dr. Tran Thi Thuy Hoa’s presentation at the World Rubber Summit 2018 in Colombo