Falling rubber prices have been hitting local farmers and businesses for over a year.
The price had fallen sharply from VND25,000 per kilo in the Central Highlands in mid-2012 to VND8,000-9,000 per kilo today, according to farmers.
Rubber market experts said the falling price was following a global trend because large importers of Vietnamese rubber such as China had high inventories, and supplies were plentiful following harvests in Thailand and Malaysia.
In July, the average export price dropped by 13.7 per cent against the same period last year to US$2,191 per tonne, according to the Ministry of Industry and Trade.
This has had a negative impact on exports, and in the first seven months of this year, volume fell by 0.1 per cent to 500,000 tonnes and value plunged 17.6 per cent to $1.22 billion compared to the same period last year.
Nguyen Thi Khuong, a farmer in Cu Mgar District, Central Highland Dak Lak Province has been growing rubber trees since 1996. She said that the drop in price had caused her huge losses because she still had to pay workers’ salaries and interest on bank loans.
Nguyen Van Tam, a farmer from Dak Rlap District, Central Highland Dak Nong Province, said it was approaching harvest time but he didn’t want to gather his crop when prices were so low because production costs were high and he would end up making a loss.
The Dak Lak Rubber Co Ltd had also suffered with the farmers, said Le Thi Bich Thao, head of the company’s administrative office.
“The price of processed latex had declined by 38 per cent to VND43 million per tonne against early 2012, causing his company’s H1 revenue to fall 50 per cent year-on-year,” Thao said. Last year, the company achieved VND1.1 trillion in revenue.
The company would have to cut expenditure and increase output to reach its target for the year, she said.
Rubber export enterprises expected output to increase but prices to fall due to high supply, according to the Viet Nam Rubber Association.
Rubber exports for this year were estimated to fall by 7.7 per cent in volume and 16.3 per cent in value compared with 2012, said the Ministry of Agriculture and Rural Development. â€” VNS