A rubber production line in Viet Nam. A rubber trading floor for Southeast Asian countries will be open this year. — Photo Trong Dat

HA NOI (Biz Hub) — Southeast Asian countries expect to develop a rubber-trading floor for regional rubber-producing countries to actively fix export rubber prices on the world market, Vietnamese and Thai officials announced during talks.

During talks between Viet Nam's Minister of Agriculture and Rural Development Cao Duc Phat and Thai Minister of Agriculture and Cooperatives Petipong Pungbun Na Ayudhya in Ha Noi on Thursday, the Thai minister said the trading system would shape a common market and fix price ranges in the region to limit vulnerability to the fluctuations in rubber price currently being experienced.

The Thai official noted that once Viet Nam joins the network, its total rubber output will account for 70 percent of global production.

In recent years, prices have been on a downward spiral, dipping below production costs and resulting in losses for farmers and rubber-producing countries in general.

Thailand, Malaysia and Indonesia have already approved the proposed trading network, inviting Viet Nam, Laos, Cambodia and Myanmar to join them.

The seven countries are expected to manage their own export rubber prices, and each country will have its own rubber-trading floor.

In Viet Nam, the trading floor was likely to be based in the central city of Da Nang, remarked a Thai representative.

Minister Phat asserted that Viet Nam would work closely with Thailand, Indonesia and Malaysia, initially by sending officials to determine appropriate solutions.

During the talks, both ministers also shared their experiences in developing a public-private partnership for agriculture.

According to Viet Nam's Ministry of Agriculture and Rural Development, the nation exported 137,000 tonnes of rubber in the first two months of this year, earning US$202 million. The exports had a year-on-year increase of 30.5 per cent in volume but a year-on-year decrease of 6.3 per cent in value.

China, Malaysia and India were the largest export markets of Vietnamese rubber, it said.

The average export rubber price in January dropped 31.3 per cent to $1,423 per tonne against the same period last year.

Last year, Viet Nam exported 1.07 million tonnes of rubber, earning $1.79 billion. The exports experienced a surge of 0.2 per cent in volume but a drop of 27.7 per cent in value compared with 2013. — VNS