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Cross-border rubber exports slow   2010-05-09 - Sai Gon Tiep Thi

Rubber exports along the China border have decreased since late April 2010. Chinese partners have reduced their purchase volumes unexpectedly, forcing prices down.



Dinh Van Tien, Head of the Import-Export Division of Vietnam Rubber Group, reported that the cross-border export price has dropped from over 70 million dong per ton to 63 million dong and are still falling.


China has taken action to cool the heated rubber market which was quite active in the first months of the year. On April 22, China marketed 30,000 tons of reserved rubber latex to force prices down.


“To date, 60,000 tons of rubber latex have been sold with the aim of reducing the “rubber latex fever” that Chinese enterprises were enduring,” the director of a rubber company explained.


Tran Thi Thuy Hoa, Secretary General of Vietnam Rubber Association, acknowledged that China’s decision is understandable. According to Hoa, the reserves will not be big enough to ease the demand in China. The hot development of the automobile industry means that China requires up to 2.75 million tons of rubber latex for 2010, but domestic production will provide only 500,000 tons.


“China will still have to import rubber latex, while Vietnam remains the top choice,” Hoa nodded, asserting that enterprises should not be too worried.


Still, businesses told the press that they have been facing many difficulties because their plans have been upended.


There are no exact figures on cross-border exports for the two last weeks of April and early May. However, a Vietnam Rubber Group official revealed that the number of successful transactions dropped to 1/3 of the previous level.


Nguyen Thanh Hai, Director of Dong Phu Rubber Company, noted that Chinese partners only pay 63-64 million dong per ton.


In early 2009, cross-border rubber exports also met difficulties, because Chinaset measures to control rubber imports, what they termed “flexible barriers.” For example, China would unexpectedly adjust the import-export volume, change the gates allowed to receive goods, or alter payment methods.


Usually, China applies new measures and Vietnamese goods get stuck at the border so that the prices go down.

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