Vietnam rice exports could be stunted by limited supplies

- Last updated on GMT

Related tags: Vietnam, Rice

The Vietnam Food Association says that in 2005 turnover in rice
exports is expected to reach $1 billion, but with no plans to
increase crop growing areas, the target may well prove difficult to
reach.

Vietnam's rice exports have been growing significantly in recent years, putting in line with Thailand as the world's biggest exporters. But according to the Vietnamese Ministry of Agriculture and Rural Development, the country's rice growers may be a long way from reaching those targets as no clear programme has been implemented to increase the area devoted to farming the crop.

Deputy minister of rade Phan The Rue emphasised that Vietnam's volume of rice exported in year 2005 would be only 3.5 million - 4 million tons. The Ministry has pointed out that with these sort of volumes, rice pricing would have to improve significantly if the country was to reach the landmark $1 billion figure for its exports in 2005.

In 2004, the average price of Vietnam's rice exports was $211 per tonne. This figure was lower than that of chief competitor Thailand, which managed to achieve an average price of $270 per tonne.

According to both the Ministry and industry experts this pricing reflects continuing challenges faced over the quality of Vietnamese rice, which is generally perceived to be lower than Thai rice.

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

Vietnamese rice exports have earned the country nearly $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.

The past year has seen mixed fortunes within this industry sector as world demand for the commodity continues to increase, particularly from China. As a result many Vietnamese rice enterprises signed a large number of rice exporting contracts, after that they suffer great losses as rice prices in the world market and the domestic market rose sharply.

The Ministry warns that this year, they should be more cautious when signing contracts, despite forecasts that rice prices in 2005 will remain high and even increase slightly.

Related news

Related product

Related suppliers

Follow us

Products

View more

Webinars

Food & Beverage Trailblazers

F&B Trailblazers Podcast