Rice export decline highlights need for strategy shift

Rice producers and exporters must professionalize investment in accordance with market demand and adopt appropriate production orientation in light of declining exports and prices.

The rice market is expected to improve from the second quarter of 2019

Rice exports decrease

Data compiled by the General Department of Vietnam Customs show that in the first two months of this year, Vietnam exported 711,759 tonnes of rice worth US$311.59 million, down 14.4 percent in volume and 23.6 percent in value compared to the same period of 2018. The export price averaged US$424.4 per tonne.

Dang Thi Lien, Director of the Long An Foodstuff Co., Ltd. said the rice export price has reached its lowest level this year, resulting in a drop of rice prices in the domestic market.

Many attributed the decreases to changes in import policies, including stricter requirements for product quality and origin and official trade facilitation in such major markets as the Philippines, Indonesia and China. Meanwhile, the US and Europe are applying such high standards to rice imports that rice producers and exporters need to invest properly in production and warehousing if they are to survive competition.

Nguyen Chanh Trung, director of a rice factory, says rice importers have applied increasingly strict standards. Rice exporters to the Republic of Korea (RoK), for example, must deposit five percent of the contract value upon bidding, apart from satisfying strict technical requirements and ensuring none of the 371 banned chemicals is found in the imports, he said.

Quality, the top priority

Many say the rice industry is making no progress and needs to renovate production to improve its competitiveness. Many businesses have recently acknowledged the importance of working closely with farmers and building complete processing plants to create safe, high quality rice products.

Pham Thai Binh, General Director of the Trung An High-Tech Agriculture Joint Stock Company based in the Mekong Delta city of Can Tho said technological investment is crucial to create high quality products. Since 2011, Trung An has modernized and automated rice drying, de-husking, polishing, color-separating and packing equipment and built warehouses totaling hundreds of thousands of square meters to meet the needs of domestic and foreign customers. Trung An exports more than 100,000 tonnes of high quality rice every year despite market changes, Binh said.

Pham Minh Thien, General Director of the Co May Co., Ltd. based in the southwestern province of Dong Thap said his company upgrades production lines and workspaces on an annual basis.

Dang Thi Lien, Director of the Long An Foodstuff Co., Ltd.:

The rice market is expected to improve from the second quarter of 2019. Rice businesses need financial assistance for proper investment to survive competition.