The price of rubber has increased to US$3,300 per tonne from US$1,200 per tonne compared to the same period last year, says Ms Hoa.

Demand exceeds supply

The VRA reports that the price of rubber will continue to rise in April as supplies are limited in the world market.

The French newspaper Liberation also quotes international economic analysts as saying that the price of rubber will continue to go up in the near future.

Experts say that the domestic price has risen because of a decline in domestic supplies. In addition, in the first two months of this year, China’s rubber imports rose by 63 percent compared to the same period last year. Last year, the country imported 2.7 million tonnes.

This year, the world’s two largest rubber exporters – Thailand and Indonesia – are seeing a decline in output. The Indonesian Rubber Association says that its rubber latex output this year will drop to 2 million tonnes from 2.4 million in 2009. Meanwhile, India – the world’s fourth largest rubber producer – predicts its output will be down by 4 percent this year.

According to the Association of Natural Rubber Producing Countries (ANRPC), it will be difficult to fulfill this year’s target of 6 percent because the output of its member countries has dropped due to unfavourable weather conditions.

Seizing the opportunity

The VRA says that at this time last year due to the economic downturn, rubber production was brought to a standstill and the price of rubber latex was just US$1,200 per tonne. It rose to US$3,000 per tonne early this year and is now US$3,300 per tonne, a year-on-year increase of 300 percent.

It could be said that Vietnam’s rubber industry is entering a golden period. Thanks to price hikes in the first two months of this year, Vietnam exported 76,300 tonnes of rubber and earned US$192.7 million, down 0.1 percent in volume but up 87 percent in value.

Ms Hoa says that although the world price will continue to rise in the future domestic businesses still want to boost their exports in the next three months.

The VRA says that thanks to a proper development strategy, Vietnam’s rubber production has increased sharply over the past three years, from 601,700 tonnes of latex in 2007 to 662,900 tonnes in 2008 and 723,700 tonnes in 2009. Average yield has risen from 1,612kg per ha in 2007 to 1,661kg to 2008 and 1,717kg in 2009.

According to the Ministry of Agriculture and Rural Development, in 2009 Vietnam had 640,000 ha of rubber plantations, producing 680,000 tonnes of latex for export, and earning nearly US$1 billion. Rubber earnings are expected to increase by 10-15 percent this year.

The Government has also issued a decision on rubber plantations until 2015 with vision to 2020. Accordingly, by 2015 the country will have 800,000 ha of rubber trees and latex output will reach 1.2 million tonnes. In 2020, exports are expected to hit US$2 billion. In 2010, the rubber industry will expand rubber plantation by 30,000-40,000ha with annual output of around 770,000 tonnes. It will then export 750,000 tonnes, earning over US$1.5 billion.