Rice export of Vietnam in the second quarter dropped significantly. In May, export volume was about 400,000 tonnes, down 31 percent year on year. As of May 25, Vietnam had exported 2,111 million tonnes of rice, bringing back US$891.979 million FOB and US$928.516 million CIF. In the second quarter, export volume was projected to fall short 200,000 tonnes compared to initial expectation.
The fall was the consequence of lower world demand, crop failure and rising prices in several key suppliers, such as Thailand, Pakistan and Vietnam. In this year’s dry season, El Nino’s impact has caused the most serious drought and saltwater intrusion in 90 years in the Mekong Delta. Drought and salt intrusion have damaged people’s livelihoods and crops on a large scale as well as caused serious water shortage. The Ministry of Agriculture and Rural Development of Vietnam estimated that about 140,000 ha of rice were affected, of which approximately 60 percent were lost completely. More importantly, it’s not only the recent main crop’s output was affected but also the upcoming harvests.
Vietnam’s rice prices currently are the highest amongst Asian suppliers. This position could take away Vietnam’s competitive advantages in rice export. The pressure is building up as Thailand recently announced to put its rice inventory of 11.4 tonnes for sales.
To boost rice export in the coming period, the Ministry of Industry and Trade is strengthening negotiations on market access and non-tariff measures for this product; coordinating with relevant agencies to resolve difficulties and problems related to quarantine; residues of plant protection drugs, antibiotics to facilitate Vietnam's rice exports.
The Ministry of Industry and Trade has also been working with Vietnam Food Association (VFA) and exporters, major enterprises in markets, focusing on strengthening market watch to ensure flexible administration, able to introduce timely solutions in line with market developments when needed.
The Ministry of Agriculture and Rural Development is collaborating with the people's committees in provinces and cities as well as VFA to review and assess the impact of drought and saltwater intrusion on rice production of 2016, especially in the Mekong Delta. This information will provide the base for authorities to design suitable plans for crops, ensure domestic supply and export capacity. Additionally, the ministry regularly reviews and updates the rice supply balance for export management in order to gain initiative before market developments, ensuring food security and help improve the CPI index.
The VFA is strengthening the monitoring of the implementation of regulations on reserve circulation and the stock at the time of signing export contracts; to continue improving and enhancing operational efficiency of VFA, especially in coordinating with, guiding and supporting businesses in creating manufacturing links, building material areas, building brand names; Rice export; supporting and coordinating with major enterprises in trade and implementation of centralised contracts.
The Ministry of Industry and Trade proposed that the People's Committees of provinces and cities to strengthen collaboration with the Ministry of Finance as well as other ministries and relevant agencies to direct local functional units in implementing suitable measures to improve the accuracy of statistics of rice exported or imported across the national border.
Bao Chau
Vietnamese
