Rubber, textile industries lament materials shortage

Both textile and rubber industries have been facing big difficulties due to the material shortage. While the material prices have been increasing, producers dare not raise the sale prices because they fear they may lose customers.

Natural rubber latex prices have risen dramatically since the beginning of 2010, surpassing the highest-recorded price level to stand at 67.5 million dong/ton.

According to Le Van Tri, Deputy General Director of Casumina, rubber latex has increased by two-fold, from 33 million dong per ton in September 2009, with a 300 percent increase over the first quarter of 2009.

Large natural rubber latex providers like Thailand, Malaysia, Indonesia, India, China and Vietnam must delay harvesting latex due to the drought, which has led to the serious shortage.

Ha Phuoc Loc, Deputy General Director of Da Nang Rubber Company, noted that the company needs some 13,000 tons of materials to make tires and other products in 2010. They just purchased 4000 tons from Vietnam Rubber Group, but must collect additional rubber from other sources.

According to Loc, the 300 percent price increase presents serious obstacles for enterprises. “If the rubber latex price does not decrease by the end of May, we will have to raise prices,” Loc admitted.

Prices have risen twice in 2010 already. On January 15 and March 15, Casumina, Da Nang Rubber and Sao Vang Rubber Companies all increased prices by 10 percent.

Casumina and Sao Vang representatives also observed that they prices will remain unchanged until the end of April, but after that, if the rubber rates continue rising, they will be forced to increase prices.

Nguyen Duc Khiem, Chair and General Director of Viet Thang Textile and Garment Company, explained that visco fiber rates have been rising steadily by 10 percent every month since the beginning of 2010, from $2.2 to $2.7 per kilo. Cotton fiber has increased from $1.3 to $1.6 per kilo.

Phuong Dung, a small merchant in HCM City, provides thread and fiber. She can only provide 50 percent of the demand from textile workshops in the area. “Buyers accept high prices, but the supply is very short,” she stated.

One company’s general director pointed out that many fiber suppliers do not want to sell to domestic buyers, since the export price is high and domestic companies are always late in making payments.

In mid-April 2010, India prohibited the export of cotton to protect local industries, raising concerns in Vietnam since the country relies heavily on cotton imports.

Concurrently, China has been purchasing more materials from markets across the world, including Vietnam.

Source: Saigon tiep thi