Expanding Rice Export Opportunities and Supporting Forestry and Fishery Products

The State Bank of Vietnam (SBV) recently launched a credit package of VND15,000 billion for the forestry and fishery sectors, which is expected to help these sectors to overcome this difficult period.

Currently, China, the Philippines and Indonesia are competing to buy Vietnamese rice

According to  the General Statistics Office (GSO), in July 2023, pig and poultry farming recovered rapidly, thanks to profitable selling prices. As breeders can source breeding stock and hog prices go up, swine production will rebound in the second half of the year. However, farmers still need to keep close track of market situations and authorities need to provide timely information and administer livestock farming well.

As breeders can source breeding stock and hog prices go up, swine production will rebound in the second half of the year. However, farmers still need to keep close track of market situations and authorities need to provide timely information and administer livestock farming well.

Countries compete to buy Vietnamese rice

After India reportedly banned rice exports, most countries “rushed” to Vietnam and Thailand to look for alternatives, while bad weather and the El Nino phenomenon have exerted severe impacts on rice production in many countries around the world. Currently, China, the Philippines and Indonesia are competing to buy Vietnamese rice. GSO data showed that rice exports reached more than 4.2 million tons worth US$2.26 billion in the first half of 2023, up over 21% in volume and 32% in value over the same period of last year. The average export price of rice was US$539 per ton, 10.2% higher than a year-ago period. With this result, the rice industry was expected to export more than 8 million tons this year, 1 million tons more than in 2022.

The opportunity to accelerate rice exports is very favorable but it also poses a challenge to national food security. Therefore, the Ministry of Agriculture and Rural Development is directing solutions to rice cultivation expansion to increase rice output for export and ensure domestic consumption demand.

Vietnam cultivated over 1.19 million ha of winter rice in the year to July 15, 2023, which was a 5.8% increase from the same period of last year. This included 836,100 ha in the north (up 8%) and 358,300 ha in the south (up 1%). By mid-July, the country planted 1.91 million ha of summer-autumn rice, which was equivalent to 99.9% of the acreage in the same period of last year. This consisted of 172,900 ha in the north (down 1.3%) and 1.73 million ha in the south. The Mekong Delta alone grew 1.47 million ha (up 0.5%). Farmers started to harvest 484,900 ha of summer-autumn rice, which was equivalent to 109.5% of the acreage in the same period of 2022, including 472,100 ha in the Mekong Delta, which was 10% larger than a year ago.

The Mekong Delta planted 263,400 ha of autumn-winter rice as of July 15, 2023, which was a 5.7% decrease from the same period of last year. The acreage of autumn-winter rice shrank significantly from a year ago in some localities like Can Tho (contracting 3,300 ha), Hau Giang (1,600 ha) and Bac Lieu (900 ha). The GSO reported that autumn-winter rice often faced disadvantages due to pests and floods. Therefore, farmers needed to follow recommendations from agricultural experts.

Banks join hands to "save" aquatic and forest products

The aquaculture output was estimated at 823,100 tons in July 2023, which was a 2.6% increase from the same month of last year. The aquatic output was forecast at 474,700 tons in the month, which was a 3.4% increase (298,200 tons of fish and 123,400 tons of shrimp).

The pangasius output was projected at 133,000 tons in July, which was a 2.9% increase from the same month of last year. The output growth was attributed to the cooperation of farmers to apply advanced science and technology to production to reduce cost and waste. However, pangasius prices declined in the month due to the export market demands.

July shrimp production expanded due to large farming areas while prices tended to go up in some major markets, especially in China. The country harvested 89,400 tons of white leg shrimp, which was a 4.6% increase from the same month of last year, and 28,400 tons of black tiger shrimp, which was a 1.5% increase.

The commercial fishing output was estimated at 348,400 tons in July, which was a 1.6% increase from the same month of last year.

Aquatic exports decreased by 27.4% year on year in the first half of 2023. Forest product exports dropped by 28.8%. This downturn pushed seafood processors and furniture manufacturers into a very difficult situation where their high inventories caused most of them to operate moderately. Some had to halt operations and even went bankrupt.

A sharp decline in shrimp and pangasius purchases caused farmers to suffer huge losses. Therefore, the fishery and forestry sectors are hoping for support policies and solutions from the government, especially credit support policies. Following the directions of the Government and the Prime Minister, the State Bank of Vietnam (SBV) studied and proposed a credit package to support forest and aquatic producers and processors. On July 14, 2023, the SBV issued Document 5631/NHNN-TD guiding commercial banks to implement credit programs for forest and aquatic products.

The loan program of VND15,000 billion for forest and aquatic products will be applied until June 30, 2024. The lending interest rates in Vietnam dong will be at least 1-2% lower than the ordinary rates of the same term. Borrowers with prospective fishery and forestry projects and plans will be eligible for loans. Commercial banks can exempt or reduce service fees for their customers in this program.

Up to now, 12 commercial lenders have registered to join the program, including Agribank, BIDV, Vietinbank, Vietcombank, LienVietPost Bank, Sacombank, MB Bank, ACB, Nam A Bank, OCB, Eximbank and SHB.

Source: Vietnam Business Forum