The structure and types of natural rubber in Vietnam still heavily rely on the Chinese market and only partially meet the needs of other, more finicky markets. — Bloomberg
HO CHI MINH CITY: As the Covid-19 pandemic recedes, Vietnam’s rubber industry faces challenges from both the world market and internal factors that hinder the industry’s competitiveness.
Finicky global markets are extremely competitive and well down the development road, meaning Vietnam needs to catch up to keep pace.
Tran Ngoc Thuan, chairman of the Vietnam Rubber Association, said the competition between natural rubber-producing and exporting countries would become more intense regarding price, product quality, commercial reputation and the ability to meet increasingly stringent sustainability standards on demanding markets.
On the other hand, the structure and types of natural rubber in Vietnam still heavily rely on the Chinese market and only partially meet the needs of other, more finicky markets.
This makes it difficult for market penetration in major markets such as the United States and Japan.
In addition, a disjointed national management system and policy mechanisms such as tax declaration, value-added tax, and high-income taxation has caused industry and business growth difficulties.
Meanwhile, according to free trade agreements, natural rubber imported into Vietnam currently enjoys a tax rate of 0%, which will encourage businesses to prioritise choosing import products from Thailand, Malaysia and Indonesia.
This will create competitive pressure on domestic rubber businesses. The rubber product processing industry still faces difficulties in competing with imported products.
There is a lack of technical barriers in trade to prevent poor-quality goods from being imported from other countries, causing losses to consumers and unfair competition with domestic goods. Despite the challenges, they said the industry had advantages in the future. — Viet Nam News/ANN
