In 2014, Vietnam's rice exports still managed to achieve production targets, yet exports faced many difficulties due to competitive pressure from outside markets. Due to the quite flat export situation and fierce competition, enterprises are worried that rice exports of Vietnam in 2015 will still face many difficulties.
Low export prices
The rice export price of Vietnam is low. In 2015, rice export is predicted to hardly maintain a high level as the previous year. Oryza.com, the leading site for global rice news, said, at the end of the January 2015, export prices of many nations are averaging US$422 a tonne, down US$42 a tonne compared to 2014. For Vietnam, at the week closing date on 30th January, 5-percent broken rice export price reached US$360 a tonne, down US$10/ tonne compared to the previous week, US$25 a tonne compared to the previous month and US$45 a tonne compared to the previous year. These situations are warning signs of declining export prices while competition is increasing.
February and March are the period of winter-spring rice crop. Rice consumption on this occasion is expected to reach more than 3.6 million tonnes. Due to the oversupply, the price of rice will possibly decrease, not to mention the impact posed when Thailand begins rice stockpiling. According to the calculations of the Vietnam Food Association (VFA), domestic rice prices began to decline from the beginning of January and fell sharply in the end of January and the beginning of February.
The recent report of the Vietnam’s Ministry of Agriculture and Rural Development showed that rice export volume in February of 2015 was estimated at 200,000 tonnes with the value of US$90 million, which makes the rice export volume of the first two months of 2015, 526,000 tonnes, worth US$243 million, down 33.1 percent in volume and 34.0 percent in value compared to the same period last year. The average export price of rice in January of 2015 reached US$470.5 a tonne, down 1.36 percent compared to the same period in 2014.
Not only rice, but export turnover of agriculture, forestry and fisheries are also considerably decreased. Export turnover of agriculture, forestry and fisheries in February of 2015 was estimated at US$1.78 billion, bringing the export value of the industry in the first two months of 2015 to US$4.177 billion, down 1.9 percent compared to the same period of 2014. In particular, marine product export value was estimated at US$907 million, down 9.4 percent; primary forest product export value is estimated at US$1,046 million, up 8.9 percent compared to the same period in 2014.
Risk of shrinkage in many markets
In addition to lower export prices and fierce competition with Thailand and India, in 2015, Vietnam's rice is in danger of shrinking share in many markets, particularly the Chinese market when this country restricts import quota.
China is the largest importer of Vietnam's rice in the past three years. In 2014, Vietnam exported 2.1 million tonnes of rice to this market (accounting for over 30 percent of the country's rice exports). In addition, rice exports to this market by quota reached 1.5 million tonnes. However, Vietnam's rice exports to China in 2015 are more likely to change as they increase control and prevent cross-border smuggling. Instead, China will increase rice import quota from multiple sources with low price. In Chinese market, in 2015, in addition to Thailand, the rest of the market will be divided for Vietnam, Myanmar, Pakistan and Cambodia.
Besides, Africa is the second largest rice export market of Vietnam's. However, from 2014, due to the discharge of Thailand's rice warehouses, which made the price sometimes US$30 - 40 a tonne lower than Vietnam rice price, it has lost up to 60 percent of market share in this market. In 2015, it is forecast that Thailand will continue to dominate this market thanks to its advantage of large inventory and competitive prices.
In order to consume paddy and commodity rice in prices beneficial for farmers and to achieve rice export goal in 2015, at the end of last January, Deputy Prime Minister Hoang Trung Hai hosted a meeting on rice export in 2015. Deputy Prime Minister Hai asked relevant ministries, agencies and localities, the Vietnam Food Association (VFA) and enterprises to regularly monitor and grasp changes in rice export market, build market solutions, promote specific trade for each market in 2015 under the direction of maintaining and maximizing opportunities of concentrated and large markets, recover the commercial market for traditional rice, gradually develop new and potential market, and agree with the Ministry of Finance on the source, additional funding needed to implement rice trade promotion activities.
In addition, Deputy Prime Minister also required research and strategy development of Vietnam's rice exports associated with the implementation of the scheme to restructure agriculture of rice, contributing to strengthening the connection between rice production and consumption and improving the quality and value of Vietnam's rice.
The Government has issued a decision on the temporary stockpiling of paddy and rice of 2014-2015 winter-spring crop. Particularly, 1 million tonnes of rice in the 2014-2015 winter-spring crop in the Mekong Delta will be bought for storage, according to the paddy: rice conversion rate of 2:1, including various types of paddy and rice (including sticky, fragrant and plate types). The temporary storage time is from March 01, 2015 to the end of April 15, 2015.
The Prime Minister assigned the State Bank of Vietnam to direct a number of commercial banks to loan to buy temporary storage of paddy and rice in a maximum period of 6 months from the date of the temporary storage until the end of August 31, 2015. State Budget will support 100 percent interest rate of temporary stored paddy and rice with the maximum rate of support up to 4 months from the date of the temporary storage until the end of June 30, 2015.
Thu Ha
Vietnamese
