Rubber workers tap into lower incomes

Workers at a rubber plantation in the southern province of Binh Duong. Vietnam will cut rubber shipments by as much as 31 percent this year as a global downturn reduces demand.

Workers in the local rubber industry are facing reduced salaries and even loss of jobs as the global economic downturn slashes both demand and prices.

Many rubber plantation owners said they’ve had to ask their tappers to stop working. With cost prices remaining at VND28 million (US$1,570) per ton, they have incurred huge losses as they can only get VND18 million ($1,000) per ton.

Vu Ngoc Son, a worker at the Phuoc Hoa Rubber Company in Binh Duong Province, said he and his wife were paid a total of VND6 million ($335) per month for latex tapping in the first half of 2008.

But now he and other fellow workers are looking for temporary jobs every day to pay for food, Son said.

Rubber prices have fallen by two thirds from a record peak of VND58 million per ton in June last year. Consumption of rubber products, especially by the car industry, has fallen sharply amid the economic downturn while declining crude oil prices have reduced the cost of rival synthetic rubber.

Vietnam Rubber Group, one of the 94 members of the Vietnam Rubber Association, has forecast the average rubber price this year would be around $1,000 per ton.

The group said workers in the industry, estimated at 100,000, would be hurt as businesses would have to cut production costs and keep them to the minimum.

Le Van Binh, deputy general director of Vietnam Rubber Group, said the average salary for rubber workers last year increased to around VND4.9 million ($275) per month, a 10 percent rise over 2007.

Binh said he expected it would fall to around VND3 million ($170) per month in 2009-2010.

But some workers said their monthly salaries have already fallen even lower.

Bui Van Tan at Phu Rieng Company in Binh Phuoc Province, for instance, said now he is paid only VND2.2 million ($120) a month.

Ho Xuan Hung, Deputy Minister of Agriculture and Rural Development, said at this juncture businesses in the rubber industry need to stay calm and figure out how to maintain their production so that workers can have a stable life.

Vietnam, the world’s fourth-largest rubber exporter, will cut shipments by as much as 31 percent this year, or 200,000 tons, the Vietnam Rubber Association said in a statement last week.

The country shipped 645,000 tons, or 97 percent of its total output, in 2008, down 9.8 percent from a year earlier.

Thailand, Indonesia and Malaysia, the top three suppliers, agreed last year to pare output to bolster prices, which dropped from a 28-year high in June to a six-year low in December.

Last week, Malaysian rubber prices rose as major buyer China dived into the market. By Friday, the Malaysian Rubber Board’s benchmark SMR20 climbed to 144.95 cents a kilo from 130.70 cents per kilo a week ago.

“New enquiries from China and the dry season in key producer Thailand is pushing prices up,” said a dealer who requested anonymity.

Source: Agencies

Update from: http://www.thanhniennews.com/business/?catid=2&newsid=45356

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