"Vietnamese rubber exporters should be cautious in 2005 since China the main export market of Vietnam's rubber is realising a policy to slow the growth of the car manufacturing industry," a report by the ministry's Trade Research Institute said.
Vietnam is the world's fourth-largest exporter after Thailand, Malaysia and Indonesia.
It exports 80 percent of its latex output, 60 percent of which went to China in 2004.
The report, posted on the ministry's Web site at www.mot.gov.vn, said the rubber export earnings of state-run General Rubber Corp (Gauche) surged to more than $300 million last year, a 15-year high, due to higher demand from China.
Unlisted Gauche is the largest of Vietnam's 60 latex producers. It turned out 289,800 tonnes of latex last year and exported 250,000 tonnes, or 50.5 percent of Vietnam's shipments in 2004.
The report said China's lifting of import quotas on natural rubber since January 1, 2005 had driven up sales from neighbouring Vietnam. Vietnam exported an estimated 40,000 tonnes of rubber last month, up 11.1 percent on a year, government data show. Traders and industry sources have said China's natural rubber imports were likely to edge up between 3 and 5 percent this year from an estimated 1.3 million tonnes in 2004.
Last month, a Tokyo-based trader said the world's rubber market would face a surplus following a slowdown in China's passenger car sales.
China's domestic rubber prices were likely to stay weak at around 12,000 yuans ($1,449) per tonne before the Lunar New Year starting on February 9, China's Agriculture Ministry has said.
The price compares with an averaged export price of Vietnamese rubber in January of $1,240 to $1,350 a tonne, based on the Trade Ministry's report. Last year, Vietnam's averaged rubber export price firmed to $1,169.6 from $874 in 2003. Gauche plans to raise its rubber output slightly this year to 290,000 tonnes.
The industry set its production target at 460,000 tonnes, up from 450,000 tonnes in 2004.