Rubber industry needs better grip on competitiveness in int’l market

Thursday, Apr 13, 2023 08:04

The competition between natural rubber producing and exporting countries will become more intense. — VNA/VNS Photo

As the COVID-19 pandemic recedes, Viet Nam's rubber industry faces challenges from both the world market and internal factors that hinder the industry’s competitiveness. Finicky global markets are extremely competitive and well down the development road, meaning Viet Nam needs to catch up to keep pace.

Tran Ngoc Thuan, chairman of the Vietnam Rubber Association (VRA), said the competition between natural rubber-producing and exporting countries would become more intense regarding price, product quality, commercial reputation and the ability to meet increasingly stringent sustainability standards on demanding markets.

On the other hand, the structure and types of natural rubber in Viet Nam still heavily rely on the Chinese market and only partially meet the needs of other, more finicky markets. This makes it difficult for market penetration in major markets such as the US and Japan.

In addition, a disjointed national management system and policy mechanisms such as tax declaration, value-added tax, and high-income taxation has caused industry and business growth difficulties.

Meanwhile, according to free trade agreements, natural rubber imported into Viet Nam currently enjoys a tax rate of 0 per cent, which will encourage businesses to prioritise choosing import products from Thailand, Malaysia, and Indonesia. This will create competitive pressure on domestic rubber businesses.

The rubber product processing industry still faces difficulties in competing with imported products. There is still a lack of technical barriers in trade to prevent poor-quality goods from being imported from other countries, causing losses to consumers and unfair competition with domestic goods.

Despite many difficulties and challenges, the VRA leaders said the industry would also have many advantages in the future.

The association forecast that the world's natural rubber demand will continuously increase. The gap between supply and demand will be a great opportunity for Viet Nam to increase natural rubber production and export turnover and create jobs for rural areas and related industries.

Tran Thanh Nam, deputy minister of Agriculture and Rural Development, said that, in general, there are still many difficulties and challenges; the association needs to continue promoting its representative role while considering supporting members and businesses as an important factor contributing to promoting sustainable development of the industry in the coming time.

According to the official, sustainable development has become stronger, and Viet Nam's rubber industry must focus on improving competitiveness in the world market based on quality assurance following international standards.

Viet Nam's rubber industry requires uniform quality management nationwide while increasing the application of advanced techniques, restructuring products according to market requirements, and expanding investment in processing.

The formation of auxiliary industries is important, and at the same time, the sector must continue to promote the reorganisation of the industry according to the production value chain to improve competitiveness in the international market. — VNS

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