Rice exports of Vietnam face tough year ahead

Vietnam farmers face another difficult year as confidence falters with industry analysts particularly pessimistic the country will reach overseas sales of more than five million metric tons in 2017 the Vietnam Food Association has said

Speaking at a recent industry forum in Ho Chi Minh City, Huynh Minh Hue, secretary of the Association, noted that in 2016 rice exports dropped 25.5% in volume and 20.57% in value year-on-year— tallying in at 4.89 million metric tons to fetch US$2.12 billion.

There was an oversupply in the global market for 2016, compounded by the fact that major importing countries are increasingly relying on domestic production to supplant imports, which contributed to weak global demand, he noted.

Rice exports of Vietnam, he said, would most likely face another lacklustre year as supply outstrips demand and global competition gathers steam.

He noted the US Department of Agriculture has reported that the global rice output in 2016/17 is estimated to increase by 1.6% from last year to 480 million metric tons due to an expansion of the area under cultivation in several countries including Australia, Myanmar, Brazil, India, Indonesia, North Korea, Pakistan, Thailand, and the US.

Global rice exports, he added, are expected to jump by one million metric tons or 2.6% to 40.6 million metric tons.

In addition, he said global rice stockpiles have been steadily inching upwards over the past three years and are expected to reach their highest levels since the 2001/02 crop in the coming year.

Huynh The Nang, chair of the Association, in turn pointed out that despite the obstacles Vietnam exports face, rice farmers and other actors in the industry have set targets exceeding the volumes achieved last year.

However, he acknowledged the lofty targets are unlikely to be achieved.

He suggested the Plant Protection Department and other pertinent governmental agencies implement measures to improve the food safety of Vietnamese rice to ensure it satisfies the requirements of the stricter markets.

Mr Hue subsequently called on the Ministry of Agriculture and Rural Development to invest in an international standard laboratory in Can Tho aimed at improving the country’s rice quality, with emphasis on reducing chemical residues.

Mr Nang said it is imperative that authorities in rice growing regions do more to ensure farmers comply with food safety standards as well as implement measures to encourage them to use more certified rice seedlings.

Do Ha Nam, chair of the Intimex Group JSC – one of the country’s 10 largest rice exporters – commented that while exports of most types of rice were lower in 2016, exports of Japonica and sticky rice increased by 136.95% and 96.59%, respectively.

He recommended government officials work with China to bolster these types of rice exports.

Most importantly, he noted that Vietnam rice faces tough competition in terms of price from Pakistan and India. He suggested more farmers cultivate varieties like fragrant and sticky rice, to increase overseas sales in the US and EU markets.

Lastly, Le Thanh Tung of the Crop Production Department postulated that Vietnam farmers and exporters have the greatest potential in 2017 to boost exports of sticky, fragrant, Japonica and other high-quality rice varieties.