Vietnam May Fail to Reach US$1Bln Rice Exports in 2005

Vietnam May Fail to Reach US$1Bln Rice Exports in 2005

Vietnam, the world’s second largest rice exporter, is targeting to earn around US$1 billion from rice exports in 2005, however, with no plans to increase crop growing areas, the target may well prove difficult to reach, according to the Vietnam Food Association (Vietfood).

Vietnam’s rice exports have been growing significantly in recent years, putting them in line with Thailand but the country’s rice growers may be a long way from reaching those targets as no clear program has been implemented to increase the area devoted to farming the crop.

Vietfood, the country’s rice export managing body, emphasised that Vietnam’s rice export volume in 2005 would be only around 3.5-4 million tonnes, pointing out that with these sort of volumes, rice pricing would have to improve significantly if the country was to reach the landmark US$1 billion figure for its exports in 2005.

In 2004, the average price of Vietnam’s rice exports was US$211 per tonne. This figure was lower than that of chief competitor Thailand, which managed to achieve an average price of US$270 per tonne. According to experts, this pricing reflects continuing challenges faced over the quality of Vietnamese rice, which is generally perceived to be lower than Thai rice.

Vietfood said that a significant improvement in the quality of rice exports will have to come into effect almost immediately in order to achieve its goal of increasing the value of Vietnamese rice exports in the course of 2005.

The industry is required to raise the quality of its product as global competition for rice exports, particularly from Thailand, is fierce, experts and businesses said. “Appropriate measures must be taken to improve the quality of rice,” said Le Viet Hai, director of rice producer Mekong Can Tho.

“The world turns to Thailand when it wants high-quality rice, while poor countries like those in Africa often come to Vietnam to purchase lower-grade rice,” he said. “But even Africa will get richer, and when the time comes, they will choose other countries for quality rice.”

Vietnamese rice exports have earned the country nearly US$10 billion in the past sixteen years, but despite this, the Vietnamese Ministry of Agriculture and Rural Development has continued to voice its concerns that there is still plenty of room to further enhance both production and productivity.

According to the ministry, one of the most significant obstacles is the fact that a low level of stability in farming, processing, storage and marketing of rice still exists in the sector. Sixteen years since Vietnam entered the world rice market, there is still no master plan to develop specialised rice farming areas, despite some localities in the Red River Delta and the Mekong River Delta having plans for rice growing and processing.