Huge potential remains for rice exports

Raising product quality and winning rice bids have been opening doors for Vietnamese rice to access major markets, assessed the Ministry of Industry & Trade (MoIT).

Huge potential remains for rice exports.

The Philippines' National Food Authority (NFA) announced the opening of bidding for rice purchase of 250,000 tons in May 22. Also in May, Vietnam has won the bid of providing 130,000 tons of rice for this country. 

In the first four months, Vietnam's rice export has increased 23.8% in term of quantity and 39.7% of turnover year on year, reaching 2.2 million tons for US$1.11 billion, said the General Department of Vietnam Customs. 

The average rice export is traded at US$502.5 per ton, up 12.8% in compared with the same period of last year and considered a high growth rate in recent 5 years. It was thanks to Vietnam getting rice export contracts recently, said the MoIT.

Specifically, in quarter I, Indonesia has opened 2 consecutive bidding for rice purchase, for which Vietnam won the contract of providing 141,000 tons rice in January and another 300,000 tons in second bidding in April. The delivery period is set from May to July. 

Also in May, Vietnam has won bidding for providing rice for Philippines. Besides traditional markets with high volume of rice export, other new markets also witnessed high growth after 4 months, including Bangladesh with 91 times increase in quantity and 61 times in turnover, Iraq with 11 times increase in quantity and 16 times in turnover. 

Vietnam Food Association (VFA) said in this May, a number of private contract for rice purchase will be signed at thousands of tons. In addition to traditional markets, rice export companies are looking at opportunities in markets where Vietnam has signed free trade agreements, such as Korea and Australia. 

Another positive note informed by the MoIT was the change in rice export structure toward high quality rice and a reduction of medium and low quality rice. In 2017, the export volume of low and medium quality rice accounted for 3.88% and 8.24% of total rice export volume. 

Vietnam's rice export in the first four months reached 2.16 million tons for US$1.1 billion, according to the Ministry of Agricultural & Rural Development (MARD), up 21.7% in terms of quantity and 37.7% in value compared to the same period of last year. 

In 2018, Vietnam set the target of exporting 6.5 million tons of rice, said Vice Minister of Agricultural and Rural Development Ha Cong Tuan to Vietnam News Agency.

The Philippines is currently Vietnam's top rice importer with 26.9% of the total exported amount, followed by China (23.5%). 

In particular, Vietnam's export price was higher than that of Thailand. In 2016, the average export price was US$435 per ton, which has increased to US$450 in 2017 and US$475 in 2018. 

The growth rate of the Vietnamese agricultural sector was set at 3%, while the targeted export value of agricultural products was US$40 billion, according to Prime Minister Nguyen Xuan Phuc's statement at MARD's January 4 meeting on the performance of the sector in 2017 and its plans for 2018.