Rubber latex of Quang Tri Rubber Co Ltd. — VNA/VNS Photo Ho Cau

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 Viet 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 Viet Nam. Thus, rubber exporters to this market expect their profits will be reduced greatly in the last three months.

A representative of the Viet 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 Phuoc Hoa 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.

Da Nang 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.

Viet 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