Low rice exports in January-June have poised a lot of challenges for Vietnam in the remaining months of this year, according to the Vietnam Food Association (Vietfood).
Domestic enterprises have so far exported 2.7 million tons of rice, more than a half of the set target of more than five million tons for the whole year but still much lower than expected figure of 3.7 million tons.
Vietnam often sees a larger amount of rice export in the first half of the year.
“It will not be easy to export the remaining 2.3 million tons from now to the end of this year, “ Vietfood said.
According to the association, in case there are no more unexpected rains, the country’s total rice output will likely reach 38-39 million tons this year, up 15.2-18.2 per cent over last year.
However, the Mekong Delta region, which accounts for more than half of the country’s total paddy output and makes up more than 90 per cent of the total rice export volume, reported a sharp reduction in paddy cultivation acreage.
Judging from the results of the 2005-2006 winter-spring crop, and the 2006 plans, the rice cultivation acreage will be reduced to more than 3.7 million hectares, 47,162ha lower than the 2005 figure and the output will, thus, be 340,000 tons lower than last year and the country’s rice exports will be down around 200,000 tons this year.
Rice production depends heavily on natural conditions, as it is often threatened by floods and rainstorms. Pests and rising oil prices will also affect the implementation of the 2006 plan for rice production.
The greatest challenge facing Vietnamese rice exporters is how to ensure stable quality. Despite huge investment, Vietnamese rice has not yet met the world demand for high-quality standards. This is clearly reflected by the fact that the price of Vietnamese rice is just around US$15-20 per ton lower than that of Thai rice.
This year, Vietnam plans to export 5 million tons of rice, while Thailand set its rice export target at 7.5 million tons. Therefore, to become a strong rival of Thailand, Vietnam needs to see greater efforts from all sectors and ministries, particularly rice export enterprises. In recent years, the export of Vietnamese rice has experienced many ups and downs due to disagreements among local businesses.
According to the association, enterprises will focus on collecting rice in the next two months to implement the signed contracts to export 440,000 tons of rice to the Philippines and 50,000 tons of 5 per cent broken rice to Iraq at a price of US$270 per ton, US$12 higher than the current export price. In the coming time, Iraq may import another 150,000 tons of rice from Vietnam as Vietnamese rice is cheaper than Thai rice.
As rice prices are rather low in the domestic market, businesses have signed new contracts to export rice at low prices. However, they will suffer losses if rice prices go up in the coming time.
The fluctuation in the rice market has raised many questions about why the signing of such contracts continues despite earlier warnings from the Vietnam Food Association against the export of rice at low prices.
Farmers hope that rice prices will increase as forecast. This will depend highly on the efforts of rice exporters and Vietfood to win high value contracts to sell rice at higher prices.
Trade Ministry
Vietnamese
