Vietnam’s rice exports boom, outpacing other produce exports

06:00 | 01/07/2020 Trade

(VEN) - With improved quality and expanded markets, rice became the biggest Vietnamese farm produce in terms of export growth in the first five months of 2020. Rice exports are expected to further increase sharply in the coming months.

vietnams rice exports boom outpacing other produce exports

Sharply increased rice exports

Strong growth

In the first five months of this year, Vietnam earned US$1.4 billion from rice exports, up 18.9 percent from the same period last year, while the value of all farm produce exports dropped 4.1 percent compared to the first five months of 2019.

Rice exports were halted for several months due to the Covid-19 pandemic and were resumed on May 1. Rice exports reached 750,000 tonnes worth US$395 million in May, an increase of 47 percent in volume and 55.3 percent in value over April, and 11.7 percent in volume and 35.7 percent in value compared to the same period in 2019. The rice export price reached a record in May - US$527 per tonne, up 5.6 percent from April and 21.4 from the same period last year. In the first five months, Vietnam's rice export price soared 13 percent over the same period of 2019, reaching an average of US$485 per tonne.

Prof. Dr. Vo Tong Xuan, Rector of the Nam Can Tho University, said the quality of Vietnamese rice has improved, enabling Vietnam to better meet the export demand, and increasing the price of Vietnamese rice.

Xuan added that many countries are short of rice but are unable to produce rice as fast as Vietnam, while Vietnam is capable of ensuring its national food security and at the same time meeting other countries’ demand for rice imports. The growing rice demand in foreign markets has increased Vietnam’s rice export volume and value, he said.

Improved rice quality

In comparing Vietnam's rice industry with the Thai one, Prof. Dr. Vo Tong Xuan said Thailand has a rice cultivation area of 10.3 million hectares, including more than two million hectares of high-yield rice, while Vietnam has 3.5 million hectares of rice, including about two million hectares of high-yield rice. Although Vietnam's rice area is only one third of Thailand's, the country can grow 2-3 rice crops totaling more than seven million hectares a year. Vietnam’s ST24, ST25, OM5451 and OM4900 rice varieties are by no means inferior to Thailand’s leading fragrant rice varieties in terms of quality, he said. Vietnam’s export rice price could increase to US$600 per tonne when foreign consumers become more familiar with Vietnamese rice brands, Xuan said. Vietnam’s best rice products - ST24 organic rice from the Mekong Delta province of Soc Trang that received the World’s Best Rice 2019 Award, and ST25 that won First Prize in the World’s Best Rice Contest 2019 in Manila - are sold for VND30,000 per kg (more than US$1,000 per tonne). Many businesses are focusing on selling such high-quality fragrant rice products in the domestic market.

Xuan assessed rice exports have become the highlight of Vietnam’s economic picture. African markets are very attractive and the Philippines has opened its doors to Vietnamese rice as its cultivation cost is higher than that in Vietnam. Businesses can export average quality rice to these two markets, while selling higher quality rice to the more discerning markets of the Middle East.

Vietnam is expected to export eight million tonnes of rice worth US$3.9 billion, at a price of US$480 per tonne, in 2020, 1.3 million tonnes more than the target, Xuan said.

With competitive prices and growing rice exports, the Ministry of Industry and Trade expects Vietnam would likely surpass Thailand in terms of rice exports this year.

Thanh Ha