VIETNAM: Vietnam to join world`s largest rubber producers to cut exports

Vietnam will join world’s largest natural rubber producers to cut exports in a bid to shore up the shrinking price of that commodity.

Vietnam will follow Thailand, Indonesia and Malaysia to cut its exports of natural rubber by 15 % starting 1 Mar until 31 Aug, the Indonesian association of rubber companies (Gapkindo) said.

Earlier the three member countries of the International Tripartite Rubber Organization (ITRO) which control 70 % of the world supply of natural rubber agreed to cut exports by 615,000 t from March to August. With Vietnam joining the cartel the price of natural rubber is expected to rise in international market, Executive Secretary of the North Sumatra branch of Gapkindo Edy Irwansyah said in Medan, North Sumatra.

Under the arrangement, Thailand, the world’s largest producer is to reduce its exports of natural rubber by 324,005 t, Indonesia, the second largest producer by 238,736 t, and Malaysia, the third largest by 52,259 t. North Sumatra, one of Indonesia’s largest natural rubber producing provinces, contributes to the scheme by cutting exports 38,000 t.

The decision of the four ASEAN countries would have impact on the rubber market, as they control more than 70 % of the supply of natural rubber in the world, Edy said. Edy said rubber price has remained low but in March the price began to climb, adding, he was confident the price of that commodity would continue to increase. According to Edy though rising, the price of natural rubber is still much below the level considered ideal of around USD 1.90 per kg.

Source: Antara News Agency, Jakarta, Indonesia; 15 Mar 2016
(Syed Rashid Ali, Karachi, Pakistan)