Rice being harvested in the Mekong Delta City of Can Tho / PHOTO COURTESY OF TUOI TRE
Vietnam saw a year-on-year drop of nearly 19 percent in its rice exports over the first four months of 2014, as Thailand scooped up many of its traditional markets, the Vietnam Food Association (VFA) reported.
Tuoi Tre (Youth) newspaper quoted the VFA, Thursday, as saying that Vietnam had exported over 1.75 million tons of rice by the end of April--an 18.17 percent drop, year-on-year.
The exports earned US$765 million, a decrease of 18.49 percent compared to the same period last year.
In April, nearly 537,000 tons of rice were exported, down 7.32 percent from the previous month, the association said, adding that the amount also missed the target of 700,000 tons set for the month.
April has been a peak month for Vietnam’s rice exports in previous years.
VFA blamed the reduction on the loss of many traditional markets in Africa – the country’s second largest rice export market – to Thailand.
Malaysia has also stocked up on rice from Thailand to meet demands this year, while Indonesia, another important market for Vietnam, has yet to see demand for imported rice.
Pham Van Bay, vice chairman of VFA, told the newspaper that since Thai companies wanted to clean up their stockpiles, they've sold rice at cut-rate prices.
Vietnamese 5-percent broken rice sells at $385-395 per ton, while the same Thai variety is priced at $370-380.
Vietnam sells 25-percent broken rice at $355-365 per ton; Thailand sells it for $340-350 per ton.
With this significant loss of regional marketshare, Vietnam’s rice exports now mostly rely on Chinese buyers who accounted for 60 percent of exports in April, VFA said.
The association expects that the price of Vietnamese rice will depend on price fluctuations in China.
Moreover, Bay said, trade with Chinese companies always comes with a high risk of non-payment as Chinese importers will cancel a contract with a Vietnamese exporter the minute someone offers them a lower price.
VFA estimated that Vietnam will export some 6.2 million tons of rice this year, compared to 6.5-7 million forecast at the beginning of the year.
On other hand, many analysts believe that the loss of traditional markets will force Vietnamese exporters to be more active in diversifying their markets, and focus on improving their products’ quality, Tuoi Tre reported.
In recent years Vietnamese aromatic rice and glutinous rice have seen an increase in output and market share.
Over the first four months this year, for instance, Vietnam exported over 300,000 tons of aromatic rice, up more than 40 percent year on year.
A rice expert was quoted as saying that aromatic rice is now a strong product for Vietnam.
Aside from businesses’ efforts to boost its exports, the government needs to provide support for the establishment of areas that specifically produce high-quality rice.
Vietnam exported 6.61 million tons of rice last year, earning nearly $2.95 billion, down 17 percent in terms of tonnage and nearly 20 percent in value from 2012.
Todays average rice export price is $435 per ton, down 5 percent from 2012.
Like us on Facebook and scroll down to share your comment