Rubber businesses struggling to find domestic sugar consumption

Rubber businesses struggling to find domestic sugar consumption
Discussion in 'Agriculture', 05/03/15
(Saigon Times Online) - After heyday, rubber prices have now reduced to 1/3 of the peak, close proximity to the production cost. Large inventories, consumption hard, the rubber manufacturing enterprises seeking to rubber processing for domestic consumption.

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Prices can not rise well

Leaders of the Group Vietnam rubber industry in a recent meeting with leaders of the Ministry of Agriculture and Rural Development (MARD), said rubber prices have fallen continuously for about three years. If as of 2011, rubber prices reached a peak of US $ 5,000 / ton, up to now, cost only US $ 1,500 / ton, decreased to 70% compared with 2011.

Price sold about 31 million / ton, while the cost of production as a minimum to reduce still be 30 million. At this price, if the business does not smart is going hole.

"We have been negotiating with some countries with large rubber production around the world, such as Malaysia, Indonesia, Thailand to do so try not to sell rubber below US $ 1,500 / ton, avoid leaving the scene as make more holes, "the leaders said.

According to Tran Thi Thuy Hoa, director of the Office of Vietnam Rubber Association, although in recent months, the world economy recovers, demand for rubber has improved but rubber prices do not increase.

This is because the area of rubber last year, not only in Vietnam but around the world grow too fast so the stock rubber three great years. Moreover, rubber prices depend heavily on oil prices.

"Oil is the main ingredient for the production of synthetic rubber, a raw material in direct competition with natural rubber. While oil prices continued to fall, it does not expect rubber prices from increasing. We just hope the price of rubber maintain current but not continue to do so, "Mrs. Flowers said.

Superposition tax

While rubber prices affected by gasoline prices dropped double and large supply, the industry again are taxed too high, causing pressure for now. Xining eg land tax is expected to increase to 5 million / hectare, while in some provinces of Binh Duong, Binh Phuoc is 2-3 million / hectare rubber plantation land tax, is much higher than tariffs previous land.

In addition, enterprises are planting rubber rubber intercropping with some other crops to increase income in the context of low rubber prices. The garden is in the basic construction phase, not for income but are still subject to land tax. Basic construction phase with each plant is different, but it took an average of 5 to 7 years. "The land is still taxed while trees no income is very unreasonable," the group's leaders said rubber industry.

According to Hoa, the local research tax increase land where rubber is the highest peak in the period, but the duty to correct the most difficult period. If the new land tax rate, higher costs price, large inventory, businesses will go bankrupt.

Looking inland towards development

Minister of Agriculture and Rural Development Cao Duc Phat said, the Ministry will report to the Prime Minister to have solutions for taxes in the rubber industry. However, Mr Phat said that the development of the rubber industry has been hot for a lesson in agriculture. Rubber can be plants of Vietnam advantage but development must be planned and coordinated solutions rather cautious massive development, production numbers are as large as possible.

"In difficult market conditions, many grown on land where bad, no assurance techniques can not sell well due to a higher production cost selling price," Mr Phat said.

Besides, Mr Phat said that enterprises should develop the value chain and not just focus on one stitch. Currently, Vietnam is one of the four major rubber producing countries of the world but mainly exports raw materials, accounting for 80%, so the annual turnover of $ 2 billion US dollars only, the peak also only 3 billion dollars. However, the domestic industry has to import finished rubber with much greater value.