As  Workers collect latex from tabbed rubber trees into buckets at a farm in southern After years of massive expansion, tearing up forests and swallowing land in neighboring countries to create rubber plantations, Later this year rubber farmers will tap maturing trees from new plantations, but with global oversupply and limited storage capacity, With little prospect of government intervention to support prices, Vietnam's rubber farmers will have little choice but to sell, shrugging off industry pleas to hold back and making other leading suppliers, Thailand, Indonesia and Malaysia, nervous. "Of course we are worried," said Edy Irwansyah, executive secretary of the North Sumatran branch of the Indonesian Rubber Association, which groups exporters in the world's second-largest producer after In 2001, a rebound in rubber prices from 30-year lows of sub-50 cents a ton inspired In just seven years, the aggressive state-sponsored rubber campaign has seen output rise by 60 percent from 2007's 606,000 tons, according to data from the Association of Natural Rubber Producing Countries (ANRPC), in which This year, output is forecast to hit nearly 1 million tons, said the International Rubber Study Group, which includes rubber producing and consuming countries and forecasts supply-demand outlook. And "In the next five years ( Price war? Traders well remember 2001 when "I wonder if you could see this kind of discipline in the rubber market. I doubt it. It's still a fairly new industry for them and they still haven't as much money," said Macquarie analyst Kona Haque in Dealers say there could be price war among the main growers as production rises, with farmers possibly scrambling to cash in before any further fall in prices due to oversupply. "They need cash to feed the family, and they can't afford to hold back because they are smallholders," said an exporter in Rubber farmer Nguyen Bao in "We do not have alternatives, no other business, so we will have to stick to rubber. Yield has fallen, but I will not sell my rubber land," said Bao, who has farmed around 3 hectares since the 1980s. But efforts to revive prices could hit a snag without participation from "We have sent a letter to Vietnam Rubber Association, and they replied, supporting our effort not to sell rubber at low prices," said Irwansyah at the Indonesian rubber exporters group. "But whether Tran Ngoc Thuan, chairman of the Vietnam Rubber Association, said the association had proposed that members and domestic entrepreneurs cut natural rubber production in 2014 and avoid selling at levels lower than international prices. State media reported last month that many farmers were cutting down rubber trees in the Central Highlands Prices under pressure Although global demand for natural rubber is forecast to grow by 4 percent in 2014, the market will see a surplus of 373,000 tons this year, a fourth year of oversupply, according to Worries over economic growth and demand from The tyre-making industry makes up about 60 percent of global rubber consumption. Rubber is also used to make gloves, condoms and products in transport, construction, health and mining. The global rubber price benchmark on the Tokyo Commodity Exchange is also languishing near 18-month lows because of similar fears. The ANRPC expects Vietnam's exports to fall slightly in 2014 to 1 million tons from 1.08 million tons in 2013, and while it said domestic consumption will rise, Vietnam's closing stocks may hit a four-year high at 54,200 tons this year. And there is no sign production will ease. Top exporter the Ho Chi Minh City-based Vietnam Rubber Group said in a March statement it plans to expand rubber planting by nearly 10 percent to 430,000 hectares (1.06 million acres) by 2015, with at least 100,000 hectares in |
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