Rubber exports affected by decreasing demand

Created 07 October 2022
  • PDF
Editor Choice
Share
(0 votes, average 0 out of 5)

The selling price of rubber experienced a period of strong fluctuations in the second quarter when it recovered in June and then decreased rapidly in July.

Rubber latex of Quảng Trị Rubber Co Ltd. — VNA/VNS Photo Hồ Cầu

HÀ NỘI — The decline in rubber prices due to the fluctuating world market and slow consumption in China means the industry's profit will be less positive until the end of the year, said the Việt Nam Rubber Association.

Specifically, the selling price of rubber has strong been fluctuating in the second quarter when it recovered in June and then decreased rapidly in July.

The market was strongly affected by the pandemic, political crisis, the lack of containers, high transportation costs, sharp increases in fuel prices and slow customs clearance affecting the global supply chain.

Rubber prices in the world market continued to decline in September due to concerns about slowing demand in China.

The price of rubber is often negatively correlated with the strength of the dollar. The uptrend of the US dollars in recent years also predicts that rubber prices will remain low in the near future.

Because of price fluctuations, especially market fluctuations, China is currently reducing the amount of rubber imported from Việt Nam. Thus, rubber exporters to this market expect their profits will be reduced greatly in the last three months.

A representative of the Việt Nam Rubber Group (VRG) said that the rubber business was facing many difficulties due to the unstable market, falling selling prices and slow consumption. In addition, rising input costs have affected revenue.

Revenue of Phước Hòa Rubber Joint Stock Company decreased by nearly 50 per cent, profit after tax fell by about a third over the same period.

The company’s representative explained that the falling in profit was mainly due to the decline in latex consumption, leading to a decrease in sales of semi-finished products in the third quarter compared to the same period last year.

Đà Nẵng Rubber Joint Stock Company also recorded a decrease in profit after tax of nearly 22 per cent. The reason was said to be higher gasoline prices, declining consumption, and climbing input costs.

However, recently, despite a slump in consumption of other markets, businesses have also conquered the Indian market.

Việt Nam exported more than 11,000 tonnes of rubber to India in the first nine months of this year, up 45 per cent in volume and 44 per cent in value over the same period last year.

Thanks to the growth of the Indian market, it has balanced the decline of other markets. Customs statistics forecast that rubber export turnover is estimated at US$2.28 billion in the first nine months of this year, a year-on-year growth of 7 per cent. — VNS


Source: VNN

Maybe You Also Interesting :

» Analysts call for restoring investors’ trust after bond frauds

Pumping money into the financial market might be needed now to save businesses, but the long-term imperative is to regain investors’ faith after the recent...

» International plastics, rubber expo opens in HCM City

The 20th Vietnam International Plastics and Rubber Industry Exhibition opened in HCM City on November 23 with both offline and online displays.

» Investors return as stock market bounces back

Investors are pouring billions of dong into stocks hoping that Vietnam’s falling market has bottomed and an uptrend is around the corner.