Rice prices remain competitively low

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The Vietnam Food Association reports the country has exported 4.678 million tonnes of rice over the past eight months, down 15.7% in volume and 18.4% in value compared to a year earlier. Export prices averaged US$438.49 per tonne, a 3.2% lower than last year.

Export price dropped to a three-month record low two weeks ago. The 5% broken rice was sold at US$365 per tonne on September 6, 9% lower than in early August.

Against this backdrop, the purchasing price of rice tends to decline further and farmers will profit less or suffer more, says Deputy Director of the An Giang Provincial Agriculture and Rural Development Department Tran Ngoc Pha.

Pha explains that although Vietnam’s annual rice output continues to grow, the lack of brand names makes it difficult for its rice to fetch higher prices in competition with foreign varieties.

Nguyen Xuan Hong, vice director of the Long An Provincial Industry and Trade Department, says agricultural production is still focused on quantity rather than quality. For instance, annual rice output has risen from 2 million to 40 million tonnes, making it possible for the country to export more than 7 million tonnes of rice, but the quality of rice for export remains almost the same.

Another reason is farmers continue with their traditional production methods while the State has not invested enough in developing rice varieties of better quality.

Hong says Vietnam is not right on track. More attention should be paid to improving the quality of rice for export to push up the average price to 600-700 per tonne.

Rice quality improvement

Every business and farmer should coordinate efforts with the State in the process of rice cultivation and processing, Hong suggests.

There are some traditional markets, which are not too strict on rice quality and have less demanding customers. Exporter would rather have a closer approach to them.

Hong says price differences are decided by processing methods and finished product quality. A foreign-invested business can export rice products to American, Japanese, and European supermarkets at a price of US$700 per tonne.

So, improving the quality of rice for export in an urgent matter that requires the State to adopt suitable investment policy for businesses and farmers and the latter to implement them to the letter, Hong concludes.