Challenges and Opportunities for Vietnam’s Rubber Industry in a Post-COVID-19 Landscape

          As the COVID-19 pandemic subsides, the rubber industry in Vietnam is confronted with challenges arising from both the global market and internal factors that impede its competitiveness. Highly competitive global markets, which have already made significant strides in development, necessitate Vietnam’s efforts to catch up and keep pace.

          Tran Ngoc Thuan, Chairman of the Vietnam Rubber Association (VRA), asserts that competition among natural rubber-producing and exporting nations will intensify significantly with regards to price, product quality, commercial reputation, and adherence to increasingly stringent sustainability standards in demanding markets.

          Furthermore, Vietnam’s heavy reliance on the Chinese market for its natural rubber structure and types poses a substantial obstacle as it only partially meets the requirements of other more discerning markets. This predicament hampers market penetration in major economies such as the United States and Japan.

          Additionally, an uncoordinated national management system along with policy mechanisms related to tax declaration, value-added tax, and high-income taxation has presented difficulties for industry growth and business operations.

          Conversely, current free trade agreements stipulate a zero percent tax rate for imported natural rubber in Vietnam. This circumstance incentivizes businesses to prioritize imports from Thailand, Malaysia, and Indonesia—an inclination that exerts competitive pressure on domestic rubber enterprises.

          Moreover, the rubber product processing sector continues to grapple with challenges when competing against imported products. The absence of sufficient technical trade barriers renders Vietnamese markets vulnerable to low-quality goods being imported from other countries—a situation that not only inflicts losses upon consumers but also perpetuates unfair competition vis-à-vis domestic products.

          Despite these numerous hardships and obstacles confronting the industry, VRA leaders remain optimistic about its future prospects.

          The association forecasts a continuous increase in global demand for natural rubber. The resulting supply-demand gap presents a remarkable opportunity for Vietnam to elevate its natural rubber production capacity while boosting export turnover—thus generating employment opportunities within rural areas and related industries.

          Deputy Minister of Agriculture and Rural Development, Tran Thanh Nam, maintains that despite the many difficulties and challenges that lie ahead, the association must continue to fulfill its representative role while proactively supporting its members and businesses—a crucial factor in fostering sustainable development within the industry.

          Accordingly, the official emphasizes that sustainable development has grown increasingly paramount, necessitating Vietnam’s rubber industry to focus on enhancing competitiveness in global markets by ensuring adherence to international standards of quality assurance.

          To this end, nationwide uniformity in quality management for Vietnam’s rubber industry is imperative. Concurrently, greater utilization of advanced techniques, product restructuring based on market demands, and increased investment in processing activities are all essential measures.

          Similarly vital is the establishment of auxiliary industries. Simultaneously, the sector must pursue ongoing efforts to reorganize the industry along production value chains—endeavors aimed at bolstering competitiveness within international markets.

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