Rice exports increase in value, volume

High prices

Rice exports reached 452,000 tonnes for a value of US$347 million in May, bringing total volume and value in the first five months of the year to 2.66 million tonnes and US$1.45 billion, an increase of 13.9 percent in volume and 40 percent in value compared to a year ago.

Nguyen Thi Mai Linh from the Ministry of Industry and Trade’s Agency of Foreign Trade attributed the export growth to two factors. She said demand for rice imports had grown in some markets in recent months, while growers were increasingly shifting to high-quality rice that now comprises up to 80 percent of rice export volume.

Rice prices were higher against most export markets, with the highest reaching $US834.5 per tonne in Chile, followed by Belgium with US$660 per tonne, Australia with US$653.7 per tonne, Ghana with US$606.2 per tonne, the US with US$601.4 per tonne, and China with US$526.1 per tonne.

China has remained the largest export market for Vietnamese rice. Indonesia has returned to buy Vietnamese rice after Vietnam won an export contract to supply 300,000 tonnes to Indonesia. Vietnam also won a bid to supply 130,000 tonnes of rice to the Philippines, and three bids to export 50,000 tonnes of Japonica rice to the Republic of Korea. These deals augur positive results for rice exports in the second quarter of the year.

In the first five months of the year, common seed rice prices increased by VND100-200 per kg, while high-quality seeds increasing VND400-500 per kg.

Facilitating exports

The favorable export results are also due to a new decree proposed by the Ministry of Industry and Trade that went into effect in the beginning of this year, replacing the Governmental Decree 109/2010/ND-CP on rice exports. Accordingly, it is no longer mandatory for rice traders to own warehouses, mills, including rice and rice processing facilities. Only rice husking, milling, and processing factories and rice processing establishments must meet the standards and regulations promulgated by state agencies. In addition, organic products, rice, and antimicrobial rice products can be exported freely, without requiring certificates.

The draft decree includes mechanisms to encourage export of high quality and high value goods; abolishes regulations requiring traders to register rice export contracts with the Vietnam Food Association (VFA), stipulating criteria for registration of rice export contracts and no longer requires traders to have in stock at least 50 percent of the rice committed in signed contracts. It also eliminates the procedures for inspecting and certifying depots, milling, and processing plants by the provincial departments of industry and trade. Instead, traders are required to declare the information themselves, take responsibility for meeting the business conditions, and state management agencies will conduct post-inspections.

The document also deregulates export floor prices for transactions and contract signing, encourages administrative reform for various certificates and reduces the rice reserves required of traders from 10 percent to five percent of the volume exported in the previous six months. It supplements the regulations on encouraging and assisting traders to increase cooperation with producers, building raw material facilities, ensuring the quality of export rice, adjusting and supplementing specific provisions on the reporting regime required of traders. It also requires ministries, branches and customs offices to promptly provide information and data on export management.