10:01 | 18/05/2018 Trade
According to the Ministry of Agriculture and Rural Development, Vietnamese rice export prices are increasing rapidly. The 5-% broken rice is now selling at from US$455 to US$460 per tonne, the highest price since August, 2014. In the first three months of 2018, the average price of Vietnamese rice reached US$ 501 per tonne, an annual increase of 15 percent.
Since the beginning of the year, Vietnamese rice exports have witnessed many positive signs. The country’s average rice export volume reached 2.16 million tonnes in the first four months of this year, bringing home US$1.1 billion, up 21.7 pct in volume and 37.7 pct in value. China remained the largest importer, accounting for 29.1 pct of the market share in the first three months of 2018. In the first quarter of 2018, the Indonesian market increased 378 times over the same period last year.
In addition to the 300,000 tonnes of rice that are being delivered to Indonesia by the end of July, domestic enterprises are also boosting exports of 130,000 tonnes to the Philippines. Meanwhile, the demand for rice imports from Malaysia also increased, up 3.3 times over the same period in 2017.
It can be seen that the increase of rice exports volume in the first months of 2018 was attributed to the continuous demand in many markets. Moreover, the rice exported to countries, such as the Philippines and Malaysia, is middle quality rice, so Vietnamese enterprises could fully meet their demand. The price of rice increased thanks in part to increased demand, as well as the results of the restructuring of the rice sector in the direction of reducing the middle and low quality rice segment, while increasing the high quality rice.
Previously, Vietnam mainly exported regular rice such as IR 504. Now the country has begun to export jasmine rice and sticky rice, among others. In 2017, high quality rice accounted for 81 pct of the rice export structure. It should also be mentioned that the reduction of the area of regular rice cultivation, leading to the decrease in rice yield is also a factor that keeps rice prices stable, sometimes with increases due to high demand.
A strong selection of the rice market in recent years has become more or less a motivation for domestic businesses to focus on improving rice quality and expanding export markets. On the other hand, when the supply of high-quality rice is abundant, meeting the demands of the markets, Vietnam’s rice exports will no longer depend much on traditional markets.
It is forecast that Vietnam is expected to export about 6.5 million tonnes of rice, up 700,000 tonne compared to 2017. It is necessary to maintain the growth momentum by quickly catching demand as well as market volatility.
Furthermore, the structure of high-quality rice must firmly remain, with regular rice accounting for no more than 20 pct of exports. Once the supply of rice is controlled and the quality of rice is enhanced, it is certain that Vietnamese rice production, processing and exports will establish a firm foothold in the market.