Vietnam growers chop down rubber trees over latex price plunge

(Tuoitrenews report)

Hanoi – Farmers in southern and central Vietnam are cutting down their rubber plantations en masse as latex prices have tumbled so sharply recently that revenues are not enough to cover expenses.

The deliberate destruction targets not only immature rubber plants, but also those which are producing latex, according to rubber growers, who will switch to cultivating annual plants in place of the downed rubber trees.

“While rubber latex prices were as high as VND30,000–40,000 (€1.05–1.39) a kg this time last year, the current rate is only VND15,000 a kg,” Ho Van Thanh, a farmer in the central province of Quang Tri, explained why he decided to empty his 1.5-hectare rubber plantation that was grown nearly 20 years ago.

Thanh could only rake in a few dozens of dong a day from the plantation, while it cost him VND200,000 to hire employees to get the latex, he said.

Rubber growers in several southern provinces, including Binh Duong, Binh Phuoc, Dong Nai, and Tay Ninh, also decided to give up on their plantations.

“We had to continue losing money on rising fertiliser prices and labour costs, while no one knew when latex prices would bounce back,” Vo Hung Lam said after chopping down his two-hectare plantation in Binh Duong.

Nguyen Thi Nga, a grower in Dong Nai, did not strike down her two-hectare plantation, but decided to leave it untouched, even though it is the season to harvest latex from the trees.

“Selling the latex is not enough to cover labour costs, so why should I do that?” she explained.

The fact that most of the private-run rubber companies are exporting their products to China across the border could be linked to the sharp drops of rubber latex prices, according to Nguyen Van Minh, director of Viet Trung Co Ltd, a rubber firm based in central Quang Binh Province.

“Like other companies in the central region, all of our rubber latex is sold to Chinese partners via the border, and the prices are determined by them,” Minh said.

Minh added it was a tough problem for them to officially export the products to other markets due to the unstable supply and poor financial ability.

A business must have at least 1,000 tons (907 tonnes) of latex in stock to export, but monthly supply is not enough to cover that amount, Minh said.

“We will not have enough money to pay for operation costs if we wait to collect enough stockpiles, so we have to export via the border,” he concluded.