Analyzing the molting of rice export story

For many years, the rice export has been familiar with the chorus "high volume, low value", inferior to the heavy competitors such as Thailand and India. However, in the first half of this year, the rice export was recorded as “molting” markedly when the value of export continued to increase with the export prices, surpassing the same rice of Thailand and India. 

The rice export structure of Vietnam is having positive changes. Picture: collected.

The export value increased by 42%

According to the Bureau of Agro-product Processing and Market Development, Ministry of Agriculture and Rural Development, rice was one of the most exported agricultural products with the total export value of US$ 81.8 billion in the first half of the year, an increase of 42% compared to the same period last year. The updated data in the first five months showed that China was still the largest importer from Vietnam with 30% market share. In terms of price, in June, the exported rice price of major countries decreased compared to last month because the import demand from major markets such as Indonesia, Philippines, Africa, Bangladesh were all down. In addition, the domestic supply in these countries has also grown quickly that has caused export prices to decrease. However, it is worth noting that the export price of Vietnamese white rice with 5% broken was still US$ 450 per ton in the trend of price reduction, higher than the same product of India and Thailand. Specifically, the export price of India's same rice was only US$ 410 per ton and Thailand's was US$ 435 per ton.

Recognizing the "picture" of Vietnam's rice export in the first half of the year, Dr. Tran Ngoc Thach, Director of the Mekong Delta Rice Institute, said that Vietnamese rice had never been received so well since the export increase in volume and value. The reason was the demand increase for rice in some countries, typically in the Chinese and Southeast Asian markets. "According to statistics, China consumes 140 million tons of rice each year. This is an opportunity for us to push into this market. In addition, Vietnam had a quite successful winter-spring crop 2017 – 2018 in terms of both yield and breed structure, creating abundant raw materials for export,” Dr. Tran Ngoc Thach said.

In this regard, the agricultural expert Vo Tong Xuan added: Vietnam's rice sector had made positive progress. The rice structure had shifted towards increasing the rice segment with high quality, reducing the rice segment of middle and low quality. As a result, from the end of 2017 until now, Vietnam's rice export price had continued to grow. Currently, the price had been more than the competitors such as Thailand, Pakistan, India from US$ 50 to US$ 100 per ton.

The rice export will reach over US$ 3 billion

According to the US Department of Agriculture, the global rice supply for the 2018-2019 season would rise 1.3% to a record of 633 million tons. Meanwhile, the world rice stockpiles at the end of the season were expected to reach 144.7 million tons, up 900,000 tons from 2017-2018. Many countries were forecasted to increase in volume such as Bangladesh, Myanmar, Cambodia, Indonesia, Madagascar, Sri Lanka, Tanzania, Thailand, the United States, Vietnam and the Philippines. Therefore, the Bureau of Agro-product Processing and Market Development said that the rice export might be difficult in the second half because the prices were expected to decrease further when the supply would be added from other countries.

In this regard, Mr. Nguyen Trung Kien, Vice Chairman of the Vietnam Food Association (VFA) said that the rice export market would continue to be stable in the second half of the year. It was forecast that the rice export would reach over 6 million tons and over US$ 3 billion in value. According to Deputy Minister of Agriculture and Rural Development Ha Cong Tuan: This year, the rice export was targeted to reach 6.5 million tons. The exported rice structure was mainly good quality rice. In the long run, the way that the exported rice would continue to pursue was the quality improvement. After having quality assurance, the next promotion issue would be the brand.

With assessment of positive changes of the rice seed structure over the past time in the direction of increasing the proportion of fragrant rice varieties, high quality rice creating a driving force for export prosperity, Mr. Le Thanh Tung, Chief Representative Office in the South, the Cultivation Bureau, Ministry of Agriculture and Rural Development stated: Currently, the seed structure, high quality rice had been dominant with the rate up to 32%; the fragrant rice about 25%; the sticky rice had accounted for 15%; the average quality rice 24%; The rest had been other types of rice. This was quite suitable for the exported rice structure of FTA, in which 32% of export rice was the high quality rice; 30% was the fragrant rice, sticky rice; the Japanese Japonica rice accounted for 23%; the remaining 5% was the middle-grade rice. Mr. Tung stressed that in order to sustain the achievements, the Cultivation Bureau advised the localities to continue to increase the area of rice varieties which were considered to have export advantages of Vietnam such as the fragrant rice varieties, high quality rice. For the sticky rice varieties, the localities should only keep the seed ratio stably because the market was stable and relatively narrow (mostly in China). With Japonica rice, the cultivated area might increase due to good market prospects.