Vietnam's rice exports set for tough year ahead

Economy January 13, 2014 00:00

By Viet Nam News

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Vietnam's rice exports are likely to face another difficult year with supply outstripping demand and worsening global competition, according to the Vietnam Food Association (VFA).

Last year the country exported just 6.68 million tonnes for US$2.89 billion, a 13 per cent fall in volume and 16 per cent decline in value, VFA secretary Huynh Minh Hue said.
The average export price last year was $433.07 a tonne, down $13.79 year-on-year, Hue told a meeting held in Ho Chi Minh City yesterday to review last year’s performance and set tasks for this year.
He said there was excessive supply in the global market last year and a drop in demand in some traditional markets in the second half.
Indonesia did not buy at all while the Philippines and Malaysia reduced imports, he said.
But an increase in exports via border trade with China compensated partly, he said.
Many attendees at the meeting concurred that rice exports would continue to face problems this year as global supply remains high.
Besides, there has been a recent trend of major importing countries increasing domestic production to reduce imports, VFA chairman Truong Thanh Phong said.
“The Thai government will continue to make efforts to clear stockpiles this year, posing a greater challenge for Vietnamese exporters,” he said.
Hue said India, the world's biggest exporter, would increase its exports from 9.6 million tonnes last year to 10 million this year, mainly of premium basmati, parboiled, and broken rice.
Pakistan would remain a stable exporter of more than 3 million tonnes, he said.
“Vietnam should be prepared for fierce competition, especially from Thailand, in the export of white and fragrant rice.”
‘Focus on quality’
Despite falling demand in Southeast Asia, the region remains a major market with many government-to-government contracts, he said.
With competitive prices and freshly harvested grains, Vietnam would be more competitive when demand revives in these markets, he said.
Duong Phuong Thao, deputy director of the Ministry of Industry and Trade’s Import-Export Department, urged exporters to step up trade promotions in foreign markets.
Delegates urged the Ministry of Agriculture and Rural Development to restructure agriculture to reduce production costs and to grow less rice but of higher quality.
Phong said the agricultural sector should develop high-quality seedlings, grow varieties that are in demand in the market, and focus more on building brands for Vietnamese rice.
Nguyen Van Tien, director of the An Giang Import-Export Joint Stock Company, called on the government to strengthen quality checks of exports to safeguard the country’s prestige as well as to enable Vietnamese rice to penetrate fastidious markets.
Strengthening checks of exports over the border to China is also needed, he said.
In light of the likely hurdles, the VFA has forecast rice exports this year to be 6.5-7 million tonnes.