Rubber prices fell sharply

According to the business market department of Vietnam Rubber Group (VRG), the rubber market in 2022 will be mainly influenced by non-fundamental factors such as inflation, the risk of economic recession and the dollar, US dollar appreciation and other macroeconomic measures… These reasons outweighed other favorable ones fundamental factors for the rubber industry such as the balance of supply and demand for rubber moving towards a period of balance and scarcity and the price of rubber, oil prices remained at high levels and demand for the recovered production was high (which was supportive factors in rubber prices).

China is still the largest market for Vietnamese rubber, but rubber exports to China have faced certain difficulties over the past year due to the implementation of the “zero Covid” policy, which has affected production activities, the rubber industry and consumption in China.

The real estate crisis in China, the heatwaves that disrupted production… also had the effect of lowering the price of rubber imported into the country, thereby lowering the price of Vietnam’s rubber exports.

The average export price of most types of rubber to China in 2022 decreased compared to the same period in 2021, such as latex down 3.1%; SVR 10 decreased 3.1%; SVR 3L down 6%; RSS 3 fell 9.1%; SVR CV60 declined by 6.3%… So if Vietnam’s export rubber price averages $1,677/ton in 2021, it is estimated to average $1,547/ton in 2022, down 7.8%.

The price of rubber, in particular, fell sharply in the last few months of 2022. Mr. Le Thanh Hung, General Manager of VRG, said that the sales price of rubber fell quite sharply in the fourth quarter of 2022 compared to the average sales price of the year due to a lack of sales positive information about the consumer market. The price fell sharply, with VRG rubber latex selling price averaging VND 37 million/ton last year, down to VND 2.6 million/ton compared to the average price in 2021.

Set a new export record

Anticipating the great difficulties and challenges that will face in 2022, companies in the rubber industry, especially VRG, have timely response plans.

According to Mr. Le Thanh Hung, since the beginning of the year, the Board and Board of Directors of VRG have drastically and synchronously implemented tasks and solutions in every production and business area. Focus on proposing proactive and flexible management and administration measures appropriate to the actual situation based on optimizing existing resources to overcome difficulties and obstacles and maximize revenue, control costs and increase cost savings maximize.

VRG aims to achieve the highest possible targets in 2022 in the new normal when the Covid-19 epidemic is under control, but much harder factors are emerging than forecast; The aim is to ensure health and safety as well as to stabilize the income and life of rubber workers while maintaining stable and efficient production and operations of the group and its member units.

As a result, by the end of 2022, VRG has essentially overcome difficulties and essentially achieved the main objectives agreed by the Committee on the Management of State Capital in Enterprises: the exploitation of rubber latex is estimated at 429,000 tons, exceeding 6.2% of annual plan and an increase of 26,083 tons compared to 2021; The purchase of latex is estimated at 80,150 tons, which is 100% of the plan; used about 501,322 tons of rubber of all kinds and achieved 100% of the plan.

In terms of financial metrics, VRG’s total consolidated revenue is estimated at VND 28,600 billion, which is 101% of plan; The consolidated pre-tax profit was estimated at VND 5,200 billion, which is 106% of the plan. For the parent company – Group, sales and profit before tax are estimated at Dong 3,629 billion and Dong 1,500 billion, respectively, which are 101% and 124% of the plan, respectively. In particular, the member units of VRG have obtained stable jobs for nearly 80,000 employees with an average salary of VND 7,625,000/person/month, which is 14% above the approved salary plan.

Thanks to the efforts of VRG and other rubber industry companies, rubber exports will continue to grow in 2022. According to the General Department of Customs, Vietnam’s rubber exports will reach around 2.14 million tons worth US$3.32 billion in 2022, up 9.7% in volume and 1.1% in value from 2021’s new record in the export turnover achieved by the rubber industry in 1 year.