A farmer tends to a rubber tree in Quang Tri Province. — VNA/VNS Photo Ho Cau

HCM CITY (Biz Hub) — With global rubber prices continuing to fall after a rout last year, things are expected to remain very difficult for the industry, the State-owned Viet Nam Rubber Group has warned.

With demand too not hot last year Viet Nam's exports fell by 0.7 per cent even as prices plummeted by 28 per cent, Tran Thoai, deputy general director of VRG, told a review meeting in HCM City yesterday.

The average price was around VND37.3 million (US$1,751) per tonne compared to VND51.8 million ($2,431) in 2013.

It is expected to fall to around VND31 million ($1,408), he said.

The group has urged its member companies to try and cut production costs to around VND30 million ($1,401 ) per tonne from the current VND36 million ($1,682).

Vo Sy Luc, VRG chairman, said the group planned to focus on producing rubber-based products with high global demand.

He called on member companies to research into intercropping other crops with rubber to increase income.

Speaking at the meeting, Minister of Agriculture and Rural Development Cao Duc Phat called on the group to restructure to increase value addition and ensure sustainable development.

"The country exports nearly $2 billion worth of raw rubber, and imports large quantities of rubber-based products at much higher cost, and this requires the industry to tweak its product structure," he said.

"With supply exceeding demand, the industry also needs to control rubber output and stimulate domestic demand besides slashing production costs."

The group has set itself a profit target of VND2.53 trillion ($118.7 million) and revenue target of VND20.92 trillion ($982.48 million), or just 87 per cent of last year's figure.

It is expected to grow rubber on 416,000ha this year, including several thousand hectares in Laos and Cambodia, an increase of more than 10,000ha from 2014. — VNS