Rice exports drop following falling demand

Thursday, Dec 19, 2013 08:39

Rice stored in a warehouse of the Tien Giang Food Company. Rice exports are set to fall by around 15 per cent this year to 6.6 million tonnes. — VNA/VNS Photo Dinh Hue

HCM CITY (Biz Hub) — Rice exports are set to fall by around 15 per cent this year to 6.6 million tonnes after demand plunged in Southeast Asia, the general secretary of the Viet Nam Food Association has said.

Huynh Minh Hue told a seminar in HCM City early this week that the average export price was US$430.89 a tonne, down $14.5 from last year, as exports fetched $2.64 billion.

He blamed the situation on the fall in demand in some traditional markets in the second half of the year.

Indonesia did not buy at all while the Philippines and Malaysia reduced imports, he said.

But an increase in exports via border trade with China compensated partly and enabled farmers to sell their crops, he explained.

Next year, exports are expected to run into difficulties because of lower prices for Thai rice and stiff competition from some other major suppliers in Asia, he warned.

He said with supply exceeding demand, rice prices could continue to fall for some time.

Viet Nam should be prepared for fierce competition, especially with Thailand, in exports of white and fragrant rice, he said.

It has competitive advantages in export of fragrant and high-quality white rice to Africa and a geographical advantage in supplying the product to China, he said.

Despite falling demand in Southeast Asia, the region remains a major market with many government-to-government contracts, he said.

With competitive prices and freshly harvested grains, Viet Nam would be more competitive when demand revives in these markets, he said.

China would remain the biggest importer of Vietnamese rice, he said, but there are risks like buyers flouting contracts.

In light of the likely hurdles, the VFA has forecast rice exports next year to remain unchanged at this years figure of 6.5-7 million tonnes.

It has suggested measures to boost exports, including strengthening trade promotions in new markets, developing high-quality seedlings, and growing the varieties that are in demand in the market.

Setting new quality standards for and strengthening quality checks of exports are required to safeguard the countrys prestige, it said.

At the meeting, the VFA and 13 provinces signed a memorandum of understanding for co-operation in rice production and consumption.

Pham Van Du, deputy head of the Department of Crop Production, said areas would be identified for growing high-quality rice for exports under the MoU. They would be 500-1,000ha each, he said.

The association, on behalf of exporters and in conjunction with the Department of Crop Production, will advise farmers on what varieties of rice to grow in each region, buy their crops at market prices, revamp the rice trading system, and develop brands for the grains.

Initially, 13 areas will be identified in the Cuu Long (Mekong) Delta for growing rice. — VNS

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