The Ministry of Trade is warning rubber exporters of potentially fallacious rumours in the market about falling prices and oversupply in China, the largest single buyer of Vietnamese rubber products.
There is unverified information that tyre and tube stockpiles in China are exceptionally high. As a result, export prices to China have fallen while other markets remain stable.
The Viet Nam Rubber Association (VRA) yesterday quoted exports at around US$2,000 a tonne.
The ministry urged executives to keep calm and asked companies to study the rumour closely, saying this might be an attempt to artificially force prices lower.
The VRA added that it was normal for prices to fall during this time of year.
"It is now the rainy season and rubber yields are large. So while supply is much higher than demand, it is normal for prices to fall," said Tran Thi Thuy Hoa, VRA general secretary.
More than 60% of Vietnamese rubber is exported to China annually.
"Orders from China are increasing. Currently, many companies have come to the VRA to make orders and have asked us introduce them to local rubber producers," said Hoa.
The World Rubber Organisation estimates that global demand will increase by 6% during the latter half of the year. The organisation estimates that next year China's demand for rubber will increase by 9%, while the US' will rise by 4.7% and EU by 2.2%.
In the first half of 2007, Vietnam earned $527mil from exporting rubber, up 1.5% over the same period last year.
On Monday, a delegation of Malaysian rubber executives arrived in HCM City to study potential investment projects here and met with Ministry of Agriculture and Rural Development officials.
A conference was held yesterday between the VRA and Malaysian Rubber Committee to explore strengthening bilateral co-operation and exchange business opportunities.
Experts believe that Vietnamese rubber yields will increase to 1.5mil tonnes by 2020 if the country 15 successful in expanding the area for rubber tree plantations to one million hectares.
Source: VNE
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