Parboiled rice export market beckons Vietnam

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A parboiled rice factory being built in Long An Province. Photo courtesy of Tuoi Tre

Some rice exporters in Vietnam are switching to parboiled rice, a smart move according to insiders, since the variety fetches higher prices than white rice.

It in fact costs 30-50 percent more than white rice of the same variety, Arup Kumar Gupta, general director of Long An Province-based food company VAP, said.

In Vietnam, supply of parboiled rice is stable and the export and production systems are well established, he said.

India and Thailand account for 70 percent of the supply, but export policies are chaotic in the former while Thai prices are less competitive, he said.

There are other factors too.

Competition in the white rice market has become more bruising than ever with the entry of exporters from Cambodia, Myanmar, and Pakistan, experts say.

VAP is a joint venture between the Southern Food Corporation and Dubai-based rice exporter Phoenix Commodities.

It has a US$15-million plant that can parboil 500 tons of rice a day.

There are two other plants in the country, both also in the delta.

Parboiling refers to partially boiling rice in the husk, and involves soaking, steaming, and drying.

The process boosts its nutritional profile, and is done to around half of the world's paddy, especially in India and Thailand.

The Vietnam Food Association said the country exported nearly 16,400 tons of parboiled rice in the first quarter and plans to raise the volume to 400,000 tons a year following expression of interest from several countries.

Gupta said it is time for Vietnam to invest more in parboiling rice since, despite being a top rice exporter, its share of the parboiled market is insignificant.

Of the 35-36 million tons of rice traded globally every year, he estimated 16-20 percent to be of the parboiled variety.

Factories can buy wet rice straight from the field, saving farmers the time, money, and labor needed to dry and store.

Nguyen Tho Tri, deputy director of the Southern Food Corporation, said major markets for parboiled rice include southwestern Africa, the Middle East, South America, and parts of Asia.

It is preferred in many countries because it makes the rice dry and can be eaten with the hands.

Tri said his company is in charge of finding supply for the JV while the UAE partner would find markets.

Gupta said the new factory would break even in around five years at the latest.

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