Quality of Rice and Seafood Exports Needs Improving

The Ministry of Industry and Trade recently held a briefing meeting to review exports of the first three months of 2012. Many products had steady growth, except for rice with a significant decrease in its export turnover in the first three months. Trade deficit of US$231 million in the first quarter is considered a positive sign, said Deputy Minister Nguyen Thanh Bien of Industry and Trade.

According to data estimates by ministries, export turnover of the first three months of 2012 probably reaches US$24.52 billion, up 23.6 percent over the same period in 2011. Particularly, export turnover of 100 percent domestic invested enterprises is US$8.98 billion, equal to that in the same period in 2011; export turnover of foreign invested enterprises reaches US$15.54 billion, increasing 43 percent over the same period.

 

Regarding agricultural and maritime products, according to reports of Ministry of Industry and Trade, many products still have export quantity increases over the same period, such as tea (up 22.6 percent), rubber (up 37.6 percent), pepper (up 11.7 percent), and cashew nuts (up 17 percent). Among these products, except for rubber, other products have positive turnovers in three first months of 2012 over the same period. As for fuel and mineral products, export turnover in March is expected to be US$1.068 billion, 46 percent higher than the previous month and 27 percent higher compared to the same period; three month export turnover is estimated to reach US$2.58 billion, up 10 percent over the same period. Export of processed industrial products remains an important contributor to total export turnover, particularly, export turnover of these products in March is probably US$5.58 billion, 7.5 percent higher compared to the previous month and 33.2 percent higher compared to the same period; generally the three month export turnover of these products is estimated to reach US$15.37 billion, increasing 39 percent over the same period.

 

Assessing the export situation of growth product groups in the first months of 2012, Deputy Minister Nguyen Thanh Bien acknowledged the large contribution of enterprises with foreign direct investment. It is considered a rather positive result of export – import activities in the first months of 2012, while the world economy still faces much turbulence, and domestically prices of input materials have significantly increased. To the end of the first quarter, there are 8 product groups which have export turnover higher than US$1 billion: maritime products, coffee, crude oil, textiles, footwear, computers, electronic products, machinery components and spare parts.

 

Besides, the export of domestic enterprises has been static. In the first two months of 2012, export of this sector increased slightly (up 5.4 percent), however total export turnover of first three months of 2012 remained equal to that in the same period in 2011.

 

According to experts, in order to achieve the targeted export growth of 13 percent for 2012 set by the National Assembly, ministries, sectors and enterprises have to make a greater effort because export of the three first months has accounted for only 22 percent of plan for the whole year.

 

In order to cope with challenges existing till the end of 2012, the Ministry of Finance, Ministry of Industry and Trade and Ministry of Agriculture and Rural Development unified to control the export price in some types of products, especially rice and seafood. Deputy Minister Nguyen Thanh Bien stated: “The basic goal of controlling export in 2012 is to ensure the profit for both enterprises and producers.”

 

Referring to the above export figures, there are some existing difficulties for export this year. Markets of some key export products like coffee, textile and rice will remain difficult. Meanwhile, the discount export price factor reduces the export turnover of some other commodities such as rubber and cassava.

 

In the meeting, Mr Truong Thanh Phong, Chairman of Vietnam Food Association (VFA), said that the recent reserve quantity of rice is quite high. Besides, it is easy to recognize the vulnerability of the rice export market. Specifically, Thai government reserved high amount of rice aiming to ensure profit for its farmers as well as constrict rice export as a result of a strong decline in the global price. India also reserved an amount of rice several times higher than the country’s basic need. Furthermore, Mr Truong Thanh Phong warned: “According to this situation, domestic enterprises need to be conscious to analyze the right tendency of the market in order to avoid a cheap sell off.”

 

Mr Huynh Minh Hue, General Secretary of VFA said that Vietnam currently has more than 1.2 million tonnes of rice for export contracts, however, most contracts were signed at the end of 2011 and their export lasts till the end of the third quarter in 2012. According to Mr Huynh Minh Hue, the most important measures to boost rice exports during this time are to accept price competition. Additionally, in order to keep rice prices, Vietnam must increase high quality rice production and restrict low quality production.