Rice exports: A year full of challenges

According to the VFA, Vietnam exported more than 4.54 million tonnes of rice worth about US$2 billion in the first 11 months of 2016, down 20 percent in value and 25 percent in volume compared with the same period of 2015.

Statistics from the General Department of Vietnam Customs show that in previous years, the rice sector exported an additional 500,000 tonnes worth more than US$200 million in December. Based on these statistics, experts expected Vietnam could export about five million tonnes of rice worth more than US$2 billion in 2016 - the lowest level since 2009.

Oversupply and more technical barriers

VFA President Huynh The Nang attributed these undesired results to policy adjustments made by other rice exporters such as Thailand, Cambodia, and Myanmar, which led to increased supplies. Meanwhile, major importers of Vietnamese rice such as Indonesia and China have changed their production and export policies, looking towards food self-sufficiency. Technical barriers have been set up, directly affecting Vietnamese rice exports.

Businesses admitted that Vietnam exports low-grade rice while the demand for high quality rice is growing and technical barriers to trade are increasing.

According to Luong Hoang Thai, Director of the Multilateral Trade Policy Department under the Ministry of Industry and Trade, rice importing countries apply very high tax rates to this product and have put in place strict food safety regulations. Moreover, the volume of rice in stock of countries which are major rice producers and exporters is forecasted to be large in the 2016-2017 winter-spring crop. For these reasons, Vietnamese rice exports are predicted to face difficulties in the early months of 2017.

Reorganizing export activities

In the opinion of Pham Thai Binh, General Director of the Trung An Hi-tech Farming Joint Stock Company in Can Tho Province, Vietnam could export more rice only when Vietnamese rice is of high competitiveness in terms of quality, safety, and price.

In fact, many rice businesses have reorganized production and export activities. Nguyen Thanh Muoi, Director of the Tan Dong Tien Joint Stock Company, said that his company has promoted rice cultivation on large-scale fields totaling 1,000ha in the communes of Long An Province’s Thanh Hoa District. The company intends to build a rice flour processing plant on an area of 300ha to create high added value.

Along with this project, the company is making a branding plan to promote rice exports to difficult-to-please markets. According to Hung Lam Joint Stock Company General Director Pham Hoang Lam, the company has built the Hung Lam Rice brand for its key product, jasmine rice. The company affirmed its commitment to better rice quality and safety in 2017, thanks to a good control over the whole production process.

Under the Ministry of Industry and Trade’s draft strategy for rice export market development in the 2016-2020 period with an orientation towards 2030, Vietnam will export 6-7 million tonnes of rice worth US$3 billion annually from 2016-2020. In the 2020-2030 period, the export volume may decrease to 3-4 million tonnes but the export value is expected to increase thanks to price rises.