15:06 | 20/07/2016 Trade
(VEN) - Rice exports grew notably in the first months of this year, despite numerous difficulties. Many remedies were outlined to continue strengthening one of Vietnam’s major export items.
According to the Ministry of Industry and Trade, rice exports reached 2.5 million tonnes and US$1.13 billion in the first five months of the year, a 4.3 percent increase in volume and an 8.5 percent increase in revenue against a year ago.
China was Vietnam’s largest rice importer accounting for 36 percent of total rice exports and followed by Indonesia 16 percent.
Vietnamese rice was welcomed in new markets like Ghana increasing by almost 13 percent, Chinese Taipei up by more than 64 percent, the Ivory Coast up by almost 66 percent, and the United Arab Emirates up by 11 percent.
According to the Ministry of Industry and Trade’s Export and Import Department Deputy Director Pham Thi Dieu Ha, the domestic price of rice would not be greatly affected by Thailand’s recent stock clearance sales of 11.4 million tonnes of rice.
She said that since 2014 Thailand has sold only 5.4 million tonnes of rice from their inventories to domestic traders who have bought rice for various purposes, rather than only exports. Despite the Thai announcement that it would sell 11.4 million tonnes of stockpiled rice from May-June 2016, they actually sold just 1.1 million tonnes in May. Their rice has been stocked for a long time and quality issues have meant it has not attracted importers. Meanwhile, Vietnamese rice is new and good in terms of quality better attracting importers. For this reason, Vietnamese rice exports continue to grow despite Thailand’s stock clearance sales.
In support of rice exporters, the State Bank of Vietnam recently issued Circular 07/206/TT-NHNN amending and adding several articles to Circular 24/2015/TT-NHNN, which regulates foreign currency loans from foreign credit institutions and bank branches. From June 1, businesses were eligible to continue borrowing foreign currency until the end of December 2016 to export their goods via Vietnamese border crossings, providing that they will collect sufficient foreign currency from exports in order to repay debts.
The decision to extend foreign currency loan durations was a timely effort to lend a hand to businesses, considering that after two months of foreign currency loan suspension, many rice exporters have faced challenges caused by high dong interest rates and the increasing price of domestic rice.
To take stronger measures to boost rice exports from now to the end of the year, Deputy Prime Minister Trinh Dinh Dung asked the Ministry of Industry and Trade to quickly devise a Vietnamese rice export strategy and evaluate the implementation of Decree 109/2010/ND-CP on rice export businesses. He also asked the Ministry of Agriculture and Rural Development to provide specific evaluations on impacts of natural calamities on rice production, including droughts and the intrusion of salt water, while at the same time regularly monitoring paddy rice and commercial rice supplies and closely working with the Ministry of Industry and Trade in order to properly manage rice exports.
The Vietnam Food Association forecasted that the Philippines, Indonesia and China, which are Vietnam’s major rice importers, will increase their demand for rice imports in the last half of the year opening up an opportunity for Vietnam to strongly increase rice exports in the short term.