High quality rice exports soar

Focusing on high quality rice production

Phan Thi Dieu Ha, Deputy Director of the Agency of Foreign Trade under the Ministry of Industry and Trade, said Vietnam exported nearly 3.6 million tonnes of rice, earning US$1.55 billion in the first seven months of this year. According to the Vietnam Food Association (VFA), high-grade rice (five percent broken) accounted for 28.8 percent of the total export volume, up nearly 30 percent compared with the same period last year. Fragrant rice accounted for 24.67 percent, up 15.36 percent. The export volume of medium and low-grade rice considerably declined.

After many years coping with difficulties due to the competition with rice exports from Thailand, India, and Pakistan, Vietnamese rice has gradually regained its position in the African market. In the first seven months of this year, Vietnam exported to Africa 526,000 tonnes of rice, and this accounted for 16 percent of the total export volume, up 52 percent compared with the same period last year. Fragrant rice sells very well in the African market. Africa continues to be the second largest export market for Vietnamese rice.

The Vietnam Northern Food Corporation (Vinafood 1) recently found new export markets for Vietnamese rice. However, these markets demand high quality rice. Haiti is an example. In the past, Haiti imported rice only from the US. When signing contracts to buy Vietnamese rice, Haitian importers said they wanted to buy Vietnamese rice of equal quality to American rice but at more competitive prices.

In fact many countries are promoting high quality rice production. In recent years, Cambodia, country which has been recognized as home to the highest quality kind of rice in the world, concentrated on producing just high quality rice for export. The EU currently applies zero percent taxes and no quota to rice imports from Cambodia. Myanmar, a newly emerging rice exporter, also exports high quality rice to the EU.

VFA Secretary General Huynh Minh Hue affirmed, “In the time to come, the rice sector needs to concentrate on producing high quality rice because the export of these kinds of rice grew rapidly in the last several years.”

Building rice production chains

To shift to producing high quality rice, Hue said, Vietnam needs to have certified purebred rice varieties, apply advanced growing techniques, and pay great attention to post-harvest quality management to prevent traders from mixing different types of rice taking away consumer trust in Vietnamese rice.

“When the EVFTA takes effect, Vietnam will be licensed to export several ten thousand tonnes of rice to the EU at preferential tax rates. If Vietnam does not ensures and maintain stable quality of rice, it will be unable to make the most of opportunities to access the EU market in the future because European importers are willing to pay high prices but have very strict requirements in terms of quality,” Hue emphasized.

According to the Ministry of Agriculture and Rural Development, the Agricultural Restructuring Project indicates that in the time to come, Vietnam will expand production of some high-quality rice varieties for export. The underway Vietnam Sustainable Agriculture Transformation Project will help the Mekong Delta build large-scale field models to increase yields and improve the quality of rice for export. Farmers need to maintain links with businesses in efforts to improve rice quality because it is businesses that know very well about market demand.

Deputy Minister of Industry and Trade Tran Tuan Anh said that to boost rice exports in the time to come, Vietnam needs to deal with market access difficulties, especially traditional and concentrated markets. The Agency of Foreign Trade under the Ministry of Industry and Trade needs to conduct careful research on new markets, especially markets that have signed FTAs with Vietnam, in order to seek new export markets for Vietnamese rice. Notably, the Ministry of Industry and Trade and Ministry of Agriculture and Rural Development need to maintain more effective coordination in tightening links between farmers and trading companies so that quality rice varieties can be chosen for cultivation and suitable trade promotion measures can be taken to boost rice exports.

VFA has set an annual plan for exporting about 5.9 million tonnes of rice in 2015. From now until the year’s end, Vietnam will concentrate on boosting rice exports to China, Indonesia, Malaysia, Africa, and the US.

Phuong Lan