A worker extracts latex in the Đồng Phú rubber plantation. — VNA/VNS Photo
The Association of Natural Rubber Producing Countries (ANRPC) has revised its forecast for the shortage of natural rubber this year and warned that increased shortages may persist until 2028.
Specifically, ANRPC has lowered its forecast for the supply of natural rubber in 2024 from 14.54 million tonnes to 14.50 million tonnes due to unfavourable climatic conditions as the El Nino phase transitions into La Nina, along with a widespread leaf fall disease negatively impacting both yield and quality of rubber latex.
Smallholder rubber farmers in top rubber-producing countries, including Thailand and Indonesia, are also reluctant to expand their planting areas due to labour shortages and the emergence of more economically valuable crops.
ANRPC warns that this supply shortage could continue until 2028, leading to a global shortfall of around 600,000 to 800,000 tonnes of rubber annually.
Meanwhile demand appears to be on the rise, as ANRPC has revised its forecast for global rubber demand this year from 15.67 million tonnes to 15.75 million tonnes.
This upward revision is driven by the expectation that China's consumption will gradually recover as the Chinese government implements various policies to boost economic growth.
These developments have caused a sharp rise in global rubber prices during the first eight months of this year.
By the end of August, the price of TSR20 rubber hit US$1.8 per kilogramme, marking an increase of 34 per cent year-on-year, while the average export price of Vietnamese rubber was $1,637 per tonne, up 26 per cent year-on-year.
This price surge has boosted revenues for rubber companies, including the Việt Nam Rubber Group.
According to a recent assessment by MB Securities, the average rubber price for Việt Nam Rubber Group this year is expected to reach VNĐ36.8 million per tonne, an increase of 14 per cent compared to 2023. Total consumption is estimated at around 500,000 tonnes.
As a result, revenue from the rubber segment is projected to hit VNĐ18.35 trillion (US$716.8 million), up 9 per cent compared to 2023.
Additionally, the gross profit margin for this segment is forecast to reach 29 per cent, an increase from 22 per cent in 2023.
The rubber production segment currently contributes up to 60 per cent of the group's total profit.
Việt Nam Rubber Group's consolidated profit before tax for this year is therefore forecast to reach VNĐ5.56 trillion, a 40 per cent increase compared to 2023. — VNS