Rice exports to face difficult year

It is time for Vietnamese rice exporters to join hands to implement the Vietnam Food Association (VFA) and Rice Export Management Team plans to overcome anticipated difficulties in 2012.

This agreement was reached at the VFA review conference in HCM City on January 6.

Difficulties

According to a recent report by the VFA, Vietnam’s rice exports in 2011 reached 7.105 million tonnes, earning a record high of US$3.65 billion. Rice exports in 2012 are estimated at 6.5-7 million tonnes.

VFA President Truong Thanh Phong said that with the average price of VND6,000 per kilo in 2011, farmers could make a 50 percent profit. He said it was a bumper year for rice as exports of high-quality and fragrant rice doubled to 472,000 tonnes.

However, he said, the sector is likely to face a number of challenges in 2012 as Vietnam has contracts for only 850,000 tonnes at the beginning of the year.

Analysing the situation, VFA Vice President Pham Van Bay said the Asian market now accounts for 67 percent of Vietnamese rice exports while the African market makes up 23 percent, but these market mainly import lower-quality rice.

Bay said that in 2012, India, Myanmar, and Thailand will boost their exports of low-price rice now held in stock, which will likely cause Vietnam’s rice exports to decrease.

Suggested solutions

Phong said it is no easy task for lower-quality Vietnamese rice to compete with that from other countries, therefore, Vietnam should focus on increasing production and export of high-quality and fragrant rice.

Le Van Hai, Director of the Mekong Import-Export Company, said it is difficult to sell rice at present with the gloomy market outlook so he asked the VFA to propose stockpiling rice to maintain its price at a reasonable level

In the face of the recent drop in rice prices, Lam Anh Tuan, Director of the Thinh Phat Company, asked businesses to comply strictly with regulations from the Rice Export Management Team to protect the interests of both farmers and businesses.

Deputy Minister of Industry and Trade Nguyen Thanh Bien said his Ministry will impose strict penalties on businesses that do not sell rice at the price they have registered.

The VFA also recommended two solutions to deal with the situation, including asking members to buy rice for stockpiling and proposing that the Government help business in this effort.

It is critical that the VFA retain its traditional export markets and promote exports of high-quality and fragrant rice to West Africa, China, and other Asian markets.