The projection for lower shipments follows Vietnam agreeing with Thailand, Indonesia and Malaysia to cut rubber supply, the Customs Online newspaper, run by the customs department, cited a Vietnam Rubber Association forecast as saying. "We have encouraged rubber companies to reduce their output," said the official at the Vietnam Rubber Association, who declined to be identified by name as he was not authorised to speak to media.
"The ongoing drought has also delayed the rubber latex process and reduced output," he added. Vietnam is the world's third-largest natural rubber producer, after Thailand and Indonesia. Its rubber latex tapping often begins this month and peaks in November. Vietnam exported an estimated 312,000 tonnes of rubber in the first four months of 2016, up 26.7 percent from a year ago, based on government data released on Wednesday.
The export volume forecast for 2016 would be the lowest since 2011, when Vietnam shipped 817,000 tonnes. China, India and Malaysia are the top buyers of Vietnamese rubber. In February the International Tripartite Rubber Council (ITRC) said members Thailand, Malaysia and Indonesia, the world's top three rubber exporters, will cut exports by 615,000 tonnes.
Natural rubber prices rose 4 percent in the first quarter thanks to an ITRC export quota scheme in force in March, a seasonal output decline in Malaysia and Thailand as well as China's stronger demand, the World Bank said in a commodity market report released on April 26. "Despite the recent uptick, natural rubber prices are expected to remain weak in 2016 and increase only marginally in 2017," the report said.