Rubber price and export rise in first two months

Many local rubber exporters have seen prices increase by over 25 per cent compared to 2020

According to the estimate of the Agency of Foreign Trade under the Ministry of Industry and Trade, in the first two months of the year, rubber exports reached about 320,000 tonnes, worth $516 million, up 89.9 per cent in volume and 109.9 per cent in value over the same period in 2020.

Particularly in February, rubber exports reached about 130,000 tonnes, worth $211 million, increasing 68 per cent in volume and 86.2 per cent in value. The average export price has increased by 0.9 per cent compared to January 2021 and by 10.9 per cent compared to February 2020, up to $1,623 a tonne.

Vietnam mainly exports natural rubber to China, India, South Korea, and China, with the latter accounting for 76 per cent. In 2020, Vietnam's rubber export turnover to this market reached $1.78 billion, an increase of 18.1 per cent on-year, reaching 1.36 million tonnes in volume, up 17.3 per cent.

Vietnam is also one of the largest markets supplying rubber to South Korea. The Agency of Foreign Tradecited the statistics of the Korean Customs Service, saying that in January 2021, Vietnam was the third-largest rubber supplier to South Korea with 393,000 tonnes, worth $7.51 million, down 13.5 per cent in volume but up 8.1 per cent in value.

Natural rubber prices also recorded positive signs. The average export price in February increased by 0.9 per cent over January 2021 and by 10.9 per cent over the same period last year to $1,623 a tonne.

Dong Phu Rubber JSC (HSX: DPR) said the average selling price of rubber in the first two months reached VND46 million($2,000) a tonne, up 25.5 per cent on-year. Of this, the export price and the entrusted export price was VND43.37 million ($1885.65) a tonne, while the domestic consumption price was VND48.2 million ($2,095.651) a tonne.

Tay Ninh Rubber JSC (HSX: TRC) recorded an average selling price of VND46.3 million ($2,013) a tonne, an increase of 35 per cent compared to the average price of 2020.

According to the report on Natural Rubber Trends February 2021 of the Association of Natural Rubber Producing Countries (ANRPC), based on the preliminary estimates, world production of natural rubber is likely to fall 12.4 per cent on-year to 897,000 tonnesin February 2021, while the world consumption of natural rubber is estimated to recover at 47.5 per cent on-year to 1.103 million tonnes during the same month.

Demand for rubber in the coming time will increase due to the forecast improvements in the Chinese economy, which is the leading rubber consumer in the world, especially in 2021. At the same time, automakers boosting output also increase the demand for natural rubber.

While supply may be interrupted due to weather factors, production in major exporting countries such as Thailand, Indonesia, Vietnam, and Malaysia may decrease. As a result, the selling price of rubber is expected to continue to increase.

The International Rubber Study Group (IRSG) forecasts that the world demand for natural rubber in 2021 will recover thanks to the growth of the commercial vehicle segment, mainly due to emerging markets. Meanwhile, demand for synthetic rubber is forecast to increase 10.2 per cent compared to last year, thanks to strong demand for gloves and other products during the season.