Rice export firms worry about high input prices

After a slight decrease in volume and a slight increase in export value in the first 10 months of 2021, the prospect of rice exports from now until the end of the year as well as in 2022 is evaluated as positive. However, the high price of input materials and rice varieties are a big concern for the whole industry.

In 2021, it is forecast that Vietnam will export about 6 million tons, and the rice export market in 2022 is also quite positive. Photo: N.Thanh

The highest rice price in the world

According to the latest information from the General Department of Customs (Ministry of Finance), from the beginning of the year to the end of October 2021, Vietnam exported 5.18 million tons of rice, worth US$2.74 billion, down 3.1% in volume but up 3.7% in value over the same period last year.

The main rice export markets of Vietnam include the Philippines with US$1.1 billion, up 1.3%; China at US$460 million, down 0.7%; Ghana at US$303 million, up 7.3%.

Exports from the beginning of the year have decreased in volume, increased slightly in value, but the most notable point is that the price of Vietnamese rice has remained high.

Information from the Vietnam Food Association shows that the export price of Vietnam's 5% broken rice is currently US$425 per ton, while the price of Thai rice of the same type is US$375 per ton, while India's rice price is US$358/ton.

From the perspective of export enterprises, Mr. Pham Thai Binh, General Director of Trung An High-tech Agriculture Joint Stock Company, said the price of Vietnamese rice is the highest in the world. Amid the Covid-19 pandemic, many supply chains have been disrupted, but the rice industry has not been seriously disrupted.

Similarly, Mr. Nguyen Viet Anh, Director of Phuong Dong Food Company Limited (Dong Thap), said that although there are times when the price of rice goes up or down, in the past 5 years, the production, processing and export does not have the concept of "rescuing" rice.

“When Thailand tries to promote rice sales to the Philippines, the Philippines is only interested in Vietnamese rice even though the price of Vietnamese rice is higher," the leader of Phuong Dong Company stated.

Regarding rice exports this year, Mr. Pham Thai Binh said that in 2021, Vietnam will definitely export no less than 6 million tons of rice thanks to loyal customers and consumers' evaluation of the increasing quality of Vietnamese rice. In 2022, the rice export market is still very positive. Vietnam will export no less than 6 million tons.

Pulling down input costs

Although the export price of rice is good and has great prospects in the near future, the high production costs are a problem that causes concerns for state management agencies, export enterprises and rice farmers.

According to Mr. Truong Kien Tho, Deputy Director of An Giang Department of Agriculture and Rural Development, the province is preparing for the winter-spring crop. Currently, the price of input materials (fertilizers, pesticides, etc.) is a big barrier to farmers' profits. In the near future, there must be models and instructions to reduce the cost of products and reduce production costs for people.

“Agencies such as the National Center for Agricultural Extension, the Plant Protection Department, and the Department of Crop Production can come up with a model to reduce costs and increase efficiency in production for the Department of Agriculture and Rural Development to deploy to farmers,” said Mr. Truong. Kien Tho.

Similarly, Mr. Le Huu Toan, Deputy Director of the Department of Agriculture and Rural Development of Kien Giang province, said that the current input materials recorded in Kien Giang province are increasing by 30-40%, while the selling price of rice has not increased. Therefore, it is recommended that the authorities tighten management so that the selling price of input materials does not increase, helping farmers to reduce production costs in the winter-spring crop.

With other policies, An Giang Department of Agriculture and Rural Development proposed to have capital for cooperatives so that they can receive agricultural products and materials from factories, reducing intermediary costs for farmers. In addition, during the harvest in February and March 2021, the volume was high, so businesses also faced difficulties in purchasing capital; the proposal was to study a plan for businesses to mortgage rice. Rice borrowed from the bank, ensuring the continuous purchasing process, does not affect the price of rice.

From the perspective of enterprises, supporting the model of co-integration, a representative of Trung An Company said: "Trung An company is still loyal to the association model, the most in Kien Giang with 6,000 hectares. Agriculture and Rural Development expands this model in the Long Xuyen quadrangle, we will accompany with more than 110,000 hectares. However, the enterprise asked the Ministry of Agriculture and Rural Development and localities to consider lending to enterprises. In order to have capital to invest in dryers, storage silos, pay wages for farmers. Businesses want to do it, but are facing difficulties at this stage."

In addition to the price of input materials and loans for businesses, some localities are especially interested in rice varieties. According to the leader of the Department of Agriculture and Rural Development of Kien Giang province, in order to prepare for the winter-spring rice crop, the province is in need of a very large amount of seed rice (over 33,600 tons of seed/crop). However, the selling price of rice varieties, especially the copyrighted rice varieties, has continuously increased.

Previously, the average selling price was VND13,500/kg, now it has increased to about VND15,000/kg... Le Huu Toan suggested that the seed production units research to share the seed copyright on the basis of an agreement on a reasonable selling price; creating favorable conditions for farmers to access copyrighted varieties, high quality seeds at the lowest prices.

Mr. Le Thanh Tung, Deputy Director of the Department of Crop Production (MARD), said that the application of smart farming models and saving fertilizer needs to be researched and implemented, helping farmers reduce costs and increase profits.