Japan's Earthquake and Tsunami Pulls Down Vietnamese Rubber Price

Vietnam's rubber price went down drastically after the earthquake and tsunami occurred in Japan on March 11, according to the Vietnam Rubber Group (VRG) on Wednesday.

The price dropped to 85 million Vietnamese dong (US$40.68 million) per ton in the wake of the earthquake and tsunami, compared with 120 million Vietnamese dong/ton (US$57.44 million) on March 10, said VRG.

Insiders held rubber importers paused their business due to some Japanese automobile manufacturers temporarily stopped their production, despite the fact that Japan accounts for only seven percent of the total rubber demand worldwide.

However, rubber price will increase again in the second quarter of the year when Japanese auto plants restore their production, they said.

VRG called on Vietnamese rubber exporters not to sell products in such a chaotic situation.

According to VRG, in the first two months of 2011, Vietnam exported 121,000 tons of rubber worth US$532 million, 157 percent up in volume and 275 percent up in value over the same period last year.

Rubber export price made a record in late February to early March with approximately US$5,000 per ton, over 75 percent up year-on-year. The major markets include India, Britain, China's Hong Kong and Malaysia, of which Malaysia in January alone imported US$19.67 million  worth of rubber from Vietnam, according to the Vietnamese Ministry of Industry and Trade.

In 2010, Vietnam exported 783,000 tons of rubber worth US$2.376 billion to 39 countries, of which China accounted for 60 percent. Currently Vietnam ranks fifth worldwide in rubber cultivated areas and fourth in rubber export, according to Vietnam Customs General Department.

In 2011, Vietnam expects to export around 760,000 tons of rubber worth nearly US$3billion, VRG estimated.

The world's demand on rubber will be around 11.15 million tons in 2011, while the rubber output will be at 10.97 million tons, according to the Association of Natural Rubber Producing Countries.