After many years of low rubber prices, 2022 is the second year the rubber industry has recovered, overcoming many difficulties due to market fluctuations, economic inflation, tax refund delays, and lack of working capital and exchange rate fluctuations, maintaining development, bringing motivation to rubber growers, as well as Vietnamese rubber processing and exporting enterprises.
Slight growth in the face of many difficulties
According to statistics of Vietnam Customs, the export turnover of the whole rubber industry in 2022 is estimated at $3.31 billion, the output is 2.14 million tons, up 2.16% compared to 2021; in which, rubber products are estimated at $1.08 billion.
According to the Ministry of Agriculture and Rural Development, with the third position in the world in terms of export value, Vietnamese rubber has been present in more than 80 countries and territories around the world. At the same time, Vietnamese rubber is increasingly penetrating more and more important markets such as China, America, Europe, Korea, India...
In the first 6 months of 2022, the high price of rubber latex has boosted rubber export activities to develop strongly, making the rubber industry prosper after a year of recovery.
By the third quarter of 2022, the rubber industry still has significant growth; In which, the largest importer of Vietnamese rubber is the Chinese market, with 453,000 tons, worth USD669.14 million, up 10.4% in volume and 0.5% in value over the same period last year. In 2021, accounting for 70.2% of the country's total rubber export value.
The second is the Indian market, with 42,000 tons, worth $ 69.64 million, up 25.1% in volume and 18.3% in value over the same period in 2021, accounting for 6.2% of the total rubber export value of the country in the third quarter of 2022. However, in the last 3 months of 2022, world economic and political fluctuations have a direct impact on rubber import and export activities.
Besides, fluctuations in exchange rate and domestic tax policies have hindered the development of the rubber industry. In the last 2 months of the year, Vietnam's rubber exports are still facing difficulties because the US dollar has entered a bullish cycle. Rubber is no exception when the price of latex fell during the period when the US dollar rose strongly. Moreover, the issue that makes it difficult for businesses is that they will be refunded tax after exporting.
However, the waiting time for tax refund is too long, causing businesses to have a backlog of capital in taxes, and there is no revolving capital for importing raw materials into the factory, allocating production and processing, and meeting the next export contract. This makes it expensive to pay interest on bank loans for the temporarily paid value-added tax capital, and also slows down export activities, bringing in a turnover that is not as expected.
Read more: Rubber Industry Report
RUBBER INDUSTRY REPORT - 12/2022