Rice export market risky, Vietnamese farmers suffer constant anxiety

Vietnam is one of the biggest rice exporters in the world, but it remains highly dependent on the Chinese market.

Vietnam had a bountiful rice export season in 2018

Vietnam had a bountiful rice export season in 2018 and its rice products were exported to 150 markets. About 6.15 million tons of rice were exported in the year, estimated to bring $3.15 billion in turnover, or 5.7 percent higher in export volume, and 19.6 percent higher in export turnover compared with 2017.

In early 2018, the Ministry of Agriculture and Rural Development (MARD) reported that the average export price soared to $475 per ton from $435 per ton in 2016 and $450 in 2017. This is the highest export price in the last three to four years, which even exceeded Thai rice prices.

It was thus a surprise that rice exports would decline in the first months of 2019. MARD reported that Vietnam only exported 373,000 tons in January 2019, or 24.2 percent lower than January 2018, worth $167 million, or 30 percent lower.

MARD reported that Vietnam only exported 373,000 tons in January 2019, or 24.2 percent lower than January 2018, worth $167 million, or 30 percent lower.

Analysts explained that exports to some markets were low because some markets still had rice carried forward from 2018.

Farmers in the Mekong Delta, the rice granary of Vietnam, are nervous as the rice prices have dropped dramatically while the harvest of the winter-spring crop has begun. 

According to Luu Van Hai in An Giang province, IR50504 unhusked rice is now selling at VND4,550 per kilogram, or VND500 lower than the previous winter-spring crop. This means that farmers can pocket VND300,000-400,000 for every 1,000 square meters.

Trang Van Hoang in Dong Thap province also complained that IR50404 rice price has dropped from VND4,800 per kilogram in pre-Tet days to VND4,300 per kilogram. Meanwhile, the merchants who promised to buy his rice have not turned up yet.

The Soc Trang Industry and Trade department confirmed that Soc Trang’s people are worried as rice remains unsold. The businesses which promised to collect rice from farmers have “run away”. 

Vietnamese rice farmers are experiencing tough days because of the weak demand, which is attributed to fluctuations of the Chinese market, Vietnam’s biggest rice consumer.

Nguyen Ngoc Nam, chair of the Vietnam Food Association (VFA), said that China has raised the import tariff on Vietnam’s rice to 50 percent since June 2018.

MARD also warned of difficulties in exporting rice to China which has raised taxes and tightened control over imports.

Only 21 out of 156 rice exporters have licenses from Chinese agencies to export rice to China.

In 2017, Vietnam exported 5.89 million tons.