Posted on 22 Oct 2008
The country dodged the direct impacts from the global financial crisis, but it is now beginning to be hit by the domino effects of the world recession.
Producers and exporters are reporting that prices for many export products including rubber, coffee, pepper, rice and seafood are all seeing downward trends.
The price of rubber sap has dropped from VND58 million (US$3,400) per tonnes to between VND30 - 27 million. The Viet Nam Rubber Association claims producers must spend roughly VND28-30 million to churn out a tonne of rubber sap, while the product’s sale price is currently only VND27 million.
It is also proving difficult for producers to find customers at the price of VND27 million. This is different from previous years when rubber often saw high prices and demand in October, say industry insiders.
With the cost of production being higher than sale prices, rubber producers are stockpiling their product. Rubber producers of Dong Nai, Phu Rieng and Dau Tieng provinces, for example, say they have roughly 1,000 to 2,000 tonnes of rubber sap in stockpile.
General secretary of the Viet Nam Rubber Association Tran Thi Thuy Hoa, attributes the sharp decrease in rubber prices to the global financial crisis.
However, general director of the Viet Nam Rubber Industries Group Le Quang Thung, expresses optimism about the industry’s outlook.
The higher prices earlier this year can help rubber farmers and producers to compensate for the current low prices, says Thung.
The domestic coffee industry is also experiencing a similar trend.
Coffee export prices fell from US$2,000 per tonne last month to only $1,669 in the London Exchange due to the impacts of the global crisis, says Doan Trieu Nhan from the Viet Nam Coffee and Cocoa Association.
In the domestic market, the price for coffee currently hovers around VND26 million ($1,570) per tonne, while last month it was over VND35 million ($2,110).
Industry insiders are concerned that coffee prices will continue sliding with the beginning of the harvesting season at the end of October, which is expected to yield about 1.3 million tonnes of product.
Prices of pepper sharply decreased by roughly 25 per cent, according to the Viet Nam Pepper Association.
A kilo of black pepper in Ba Ria-Vung Tau provinces, one of the country’s leading pepper cultivation areas, has dropped from VND60,000 ($3.5) to roughly VND38,000 - VND39,000.
Domestic rice farmers and exporters also have a significant volume in stockpiles, due to difficulties in finding export markets. The price for a kilo of 5 per cent broken rice in the domestic market was reduced from VND10,000-9,000 per kilo to VND7,000.
Seafood industry insiders are concerned that it may be too difficult to meet the annual export target of $4.2 billion due to low demand for their products in the global market, especially the
World demand is significantly reduced; several importers have even cancelled contracts that were signed with Vietnamese seafood exporters, says vice chairman of the Viet Nam Association of Seafood Exporters and Producers Le Van Quang.
