Rice News Today

The Thai government has announced that Thailand and Vietnam have reached an agreement to increase the price of domestically produced rice in the global market in the context of rising costs in rice production.

Thai Minister of Agriculture and Cooperatives Chalermchai Sri-on said that while rice farmers are affected by rising production costs due to recent complicated developments, such as the COVID-19 pandemic and the conflict between Russia and Ukraine, the price of rice on the global market has increased disproportionately.

In such context, the world’s second and third largest rice exporters, Vietnam and Thailand, will join hands to negotiate a reasonable rise in rice prices through pricing mechanisms on the global market.

To implement the agreement, Thailand and Vietnam will work to create a government negotiation mechanism while trying to convince more rice exporting countries to join the initiative.

Alongkorn Ponlaboot, Thailand’s chief rice price negotiator, said that promoting fairer prices is the mission and responsibility of all rice exporting countries. As climate change is affecting rice cultivation and rice production worldwide, all parties need to work together to ensure food security.

Farmers will have to deal with unfair rice prices in the global market without help and cooperation between the parties.

President of the Thai Rice Mills Affiliation Rangsan Sabaimuang also advocates fairer prices for all parties. Therefore, the cooperation between Thailand and Vietnam has become the first step to implement the above efforts.

The President of the Thai Farmers’ Association Pramot Charoensin welcomed cooperation between Vietnam and Thailand on rice prices, but warned that India still has the largest voice in the pricing of rice in the global market as it is the largest rice exporter in the world.

Therefore, if only Thailand and Vietnam sell rice at a higher price, rice importing countries may turn to India to seek supply.

ONE of the importers/consignees of the rice shipment that reached Iloilo claimed to have all the supporting importation documents to prove that duties and taxes were paid.

Famint Corp. strongly objected to its inclusion in the list of importer/consignees that were implicated in the alleged anomalous importation of 38,400 metric tons of Vietnam rice worth more than P1 billion.

“Famint has valid sanitary and phytosanitary import clearances from the Bureau of Plant Industry, the Department of Agriculture for all its rice importations, and has duly declared all these importations with the Bureau of Customs, and paid all the applicable customs, tariffs and taxes,” it said in a statement.

“At all times, Farmint ensures and upholds compliance to all laws and regulations of the Philippines, particularly relevant government agencies, in relation to its rice importation,” it added.

The Port of Iloilo earlier acknowledged the unloading of rice but claimed that the shipments were properly documented.

It said that the rice shipments on board MV Hai Ha 58, MV Hoa Binh 54 and MV Hai Dang 168 were covered with clearances and permits issued by the Department of Agriculture-Bureau of Plant Industry and that P83,322,586.68 in customs duties and taxes were paid.

MV Royal 18, which was also carrying rice, is at the anchorage area and waiting for berthing space.

RPT-ASIA RICE-SUPPLY CONCERNS LIFT INDIAN RATES; VIETNAM LOSES OUT TO COMPETITION

* Thailand prices slip to $416-$420/t

* China, Philippines have cut rice purchases from Vietnam – trader

By Bharat Gautam

Aug 19 (Reuters) – Indian rates for rice exports rose this week as lower planting fuelled concerns over supplies from the new season, while Vietnamese prices and quality of the grain lagged peers.

Top exporter India’s 5% broken parboiled variety <RI-INBKN5-P1> was quoted at $365-$371 per tonne, up from last week’s $360-$366.

“Weather is not supporting crop in eastern and northern India. Traders have started quoting higher prices for paddy assuming lower production from the new crop,” said an exporter based at Kakinada in the southern state of Andhra Pradesh.

Neighbouring Bangladesh will begin selling rice at a cheaper rate for 5 million poor families and expand such sales from September, in a bid to rein in soaring domestic prices, which saw yet another uptick after the government hiked domestic oil prices.

“I hope domestic rice markets will be stable after the beginning of the sales,” Bangladesh Food Minister Sadhan Chandra Majumder said, adding that the country has adequate stock.

Meanwhile, Vietnam’s 5% broken rice <RI-VNBKN5-P1> were unchanged from the previous week at $390-$393 per tonne on Thursday.

Vietnamese prices are lower than Thailand’s due to weak demand and strong supplies from the summer-autumn harvest, a Ho Chi Minh City-based trader said.

The country’s two key export markets, China and the Philippines, have reduced purchases, with buyers from the Philippines more interested in low-priced rice, the trader said.

Prices have also fallen behind because the quality of rice from the summer-autumn harvest was not better than the grain from competitors, traders said.

Thailand’s 5% broken rice prices <RI-THBKN5-P1> dipped to $416-$420 per tonne from $420-428 last week. Despite declining shipping costs, there haven’t been large orders, a trader said.

Internal trade has kept domestic prices supported, another trader said, adding that there has been trading activity between the Middle East and Europe through Thailand, with continuous supply due to good rain and favourable weather. (Reporting by Rajendra Jadhav in Mumbai, Khanh Vu in Hanoi, Chayut Setboonsarng in Bangkok and Ruma Paul in Dhaka; editing by Uttaresh.V)

While commercial feed demand in recent years has been dominated by corn and wheat, Russia’s invasion of Ukraine on Feb. 24 led to price spikes for both products. It has also led to increasing concern about global exportable supplies, with the Black Sea region one of the major origins for these products. However, demand from feed buyers is not new. According to Shirley Mustafa of the UN’s Food and Agricultural Organization, this has been emerging for some time. “Use of rice for feed has been rising since 2020-21, after reaching a seven-year low the year prior,” Mustafa told S&P Global Commodity Insights. “Rice use for animal feed [aside from bran] is usually limited and confined to backyard operations since the commercial feed sector usually has more economically viable alternatives than rice. However, gains in wheat and maize prices over the past year-and-a-half or so, driven by these commodities’ own domestic and international market dynamics, have tended to narrow price differentials with rice [especially broken rice].” In China, for example, these shifting dynamics were directly linked to 2021 rice imports rising by 69% year on year to 4.96 million mt, according to data from Chinese customs, with the world’s largest exporter — India — emerging to satisfy this huge volume of broken rice demand.

Rice markets react

But the demand from feed buyers has spiked in both India and other Asian rice markets since the Ukraine conflict began. In India, for example, sources have reported instances of defaulting and low supplies, with one Kakinada-based exporter going so far as to describe the local broken rice market as a “disaster” due to the sudden influx of demand. In rice export origins which are also destination markets for corn and/or wheat, such as Vietnam, many exporters have withdrawn their broken rice offers due to high domestic demand. Vietnamese 100% broken white rice price has increased by $65/mt since the invasion of Ukraine, reaching a high of $370/mt FOB on March 25, according to Platts assessment from S&P Global. However, many sources view broken rice prices from Vietnam as hypothetical, with the country even importing substantial volumes from India to meet demand. In traditional broken rice markets — notably in West Africa — the situation is more immediately concerning from a food security perspective. In Senegal, which is a huge market for broken rice for human consumption, a sizable gap is opening up between current retail prices and replacement costs. While in part this is due to Senegal’s new retail price cap and high freight rates, the significant rise in Indian broken rice prices in recent weeks has only served to widen this gap. According to one Europe-based trader who buys for the country, this gap has reached $90/mt in recent days, and made it “impossible” to buy for Senegal at present without taking on huge financial risks. However, with sufficient stocks in Dakar for Ramadan and the following weeks, the trader added that it makes no sense to re-enter the market before the religious holiday is over, with hopes that the replacement cost gap will have narrowed in the interim.

Unusual price spreads

Because of the massive influx in demand for Asian broken rice, unusual price spreads between different rice grades have emerged. Pakistani 5% and 100% broken white rice were briefly assessed at par earlier in March while the gap was $70/mt a year prior. The spread between Thai 5% and A1 Super 100% broken white rice has narrowed to only $2/mt in recent days, compared to $51/mt a year prior. One major Singapore-based rice trader said that “some 25% [broken white rice] shipments for feed purposes” was seen from Myanmar to Europe. Sources buying from the Myanmar market have reported that offers of low-quality B234 broken white rice have been largely unavailable in recent weeks due to high feed demand, with higher quality broken rice prices also moving up substantially. Despite sources reporting no obvious reason for why feed buyers could not turn to 25% broken white rice if 100% broken white rice was unavailable, or priced uncompetitively, sales of this product for feed purposes so far remain rare. A second Singapore-based trader said that they were advising their traditional broken rice buyers in Africa to accept 25% broken white rice due to supply and price issues for 100% broken white rice. However, the first Singapore-based trader cautioned that this would ultimately “depend on corn prices.” FAO’s Shirley Mustafa agreed, saying that “because this trend is influenced by factors outside of rice markets, developments in these external markets will have an important bearing.” Mustafa added that “current forecasts suggest record-breaking supply availabilities in the major exporters this season, thanks to bumper harvests expected in India, Pakistan and Thailand. If these are realized, they should be more than sufficient to cater to the higher global needs.”

Outside forces

Despite uncertainty surrounding how this situation will play out, it is almost inevitable that feed demand will take up an unusually large portion of international rice sales in 2022. A third Singapore-based trader said that it will “not be a huge chunk … But it will not be insignificant either.” The questions which remain at this point are whether 25% broken white rice sales for feed will become more widespread and how this demand for cheap rice will impact traditional buyers of 25% and 100% broken white rice for human consumption. However, with rice still a minor player in the massive global feed market, the situation will ultimately remain at the mercy of outside forces.

Organisations and individuals must also have certificates for rice products, in accordance with the Vietnamese standards (TCVN) and fulfil their tax obligations and ensure environmental protection. — Photo cafef.vn

Viet Nam NewsHÀ NỘI — The Ministry of Agriculture and Rural Development (MARD) has issued regulations on the use of national brand GẠO VIỆT NAM or VIETNAM RICE. The rice national brand is designed to promote products, maintain prestige, create trust among consumers, as well as improve the competitiveness of Việt Nam’s rice products in the domestic and international markets. Organisations and individuals shall be entitled to use the brand when they are granted business registration certificates, enterprise registration certificates or investment certificates, along with the contents of registration for operations, processing or trading of rice products. In addition to these, organisations or individuals can own the national brand if the competent agencies grant certificates of eligibility regarding food safety in rice processing, preservation and trading or if their establishments have been granted one of these certificates: Good Manufacturing Practices; Hazard Analysis and Critical Control Point System; Food Safety Management System ISO 22000; International Food Standards, BRC Global Standards; Food Safety System Certification 22000 or equivalent valid certificates. Organisations and individuals must also have certificates for rice products, in accordance with the Vietnamese standards (TCVN) and fulfil their tax obligations and ensure environmental protection. The regulations also specify the products of rice (white rice, white fragrant rice, white sticky rice) that own brand certification. MARD has authorised the Vietnam Food Association to manage the national brand GẠO VIỆT NAM/VIETNAM RICE. — VNS

Read more at http://vietnamnews.vn/economy/427523/mard-issues-regulations-on-vietnam-rice-national-brand.html#zc8XSmCxrRsh8d3F.99

Vietnam aims to export four million tonnes of rice by 2030, pursuant to a strategy for developing the country’s rice export market in the 2017-20 period with a vision to 2030.

Loading rice for export at Saigon Port (Illustrative image. Source: VNA)

HCM City (VNA) – Vietnamese rice prices have recently increased in both domestic and foreign markets due to high demand and limited supply. Notably, Jasmine rice price is now at 565-570 USD per tonne, 65-70 USD per tonne higher compared to three weeks earlier. At the same time, Vietnam’s 5-percent broken rice is sold at 410-420 USD per tonne, up 35-45 USD per tonne, while the price of 25-percent broken rice also rises 25-30USD per tonne to 370-375 USD per tonne. In the world market, Vietnamese rice price is only lower than Thai rice’s. In the domestic market, rice prices of all kind also increased over 1,000 VND per kilo averagely. Nguyen Van Don, Director of Viet Hung Company in the Mekong Delta province of TienGiang, said the demand for Jasmine rice has surged recently, while the supply of the rice is low and some farmers are still waiting for higher price before selling their rice. Many businesses attributed the recovery in both markets to the increased consumption in the world. Recent information on some countries’ demand to import Vietnamese rice also heat the domestic market. Particularly, Bangladesh has signed a memorandum of understanding on rice trade and announced its demand of importing 250,000-300,000 tonnes of Vietnam’s 5-percent broken rice in the coming time and about 500,000 tonnes for the whole year, while the Philippines also revealed its plan to buy 250,000 tonnes of rice in June and July. According to the Vietnam Food Association, Vietnam suffered a drop in rice export in the first five months of this year. However, the export has recovered since May with rise of 27.3 percent in volume and 24 percent in value in May.-VNA

* Prices rise in Thailand, India, Vietnam * Bangladesh seals import deal with Vietnam By My Pham VIETNAM, June 15 Asian rice prices rose this week, extending gains from the week before on strong demand from importers including Bangladesh and the Philippines, traders said on Thursday. In Thailand, benchmark 5-percent broken rice RI-THBKN5-P1 was quoted at $450-$457 a tonne, free-on-board (FOB) Bangkok, up from $440-$457 last week. Thai rice prices have been rising steadily since March, when traders started loading ships, and touched levels unseen since August 2013 last week. Exporters continue to buy the grain from rice millers to fulfill shipments, with demand from Bangladesh, Iran, Iraq and the Philippines keeping prices high, traders said. “Prices are still rising and haven’t stopped,” a Bangkok-based trader said. “Supply is low and exporters are still buying stocks for shipment, and global demand is still high.” The Thai off-season crop is expected to arrive from around August to September. In Vietnam, the 5-percent broken rice RI-VNBKN5-P1 was quoted at $410 a tonne, FOB Saigon, up from $395-$400 last week and the highest level since November 2014. Vietnam’s new harvest season begins late-June, traders said. Rice prices in the country have increased since early May on expectation of stronger demand from foreign rice importers amid limited supply. Bangladesh will import 200,000 tonnes of white rice at $430 a tonne, and 50,000 tonnes of parboiled rice at $470 a tonne from Vietnam in a government-to-government deal, said Ataur Rahman, additional secretary at the food ministry. The rice will be shipped in 60 days, with the first consignment expected to arrive in 15 days, Rahman said.

Bangladesh is also in talks with Thailand and India to import rice to cool record-high local prices at a time when state rice stocks are at 10-year lows. The Philippines has said it would issue a tender next month to import 250,000 tonnes of the grain from Thailand and Vietnam, and possibly also India. In India, 5 percent broken parboiled rice prices RI-INBKN5-P1 jumped by $7.00 per tonne to $422-$425 on a rally in overseas prices and good demand from buyers in Africa. “Earlier, buyers were shifting to other suppliers as Indian rice was expensive. Now, since prices have risen in Thailand and Vietnam, we are equally competitive,” said an exporter based in Kakinada in the southern Indian state of Andhra Pradesh. India’s non-basmati rice exports in April fell 18.5 percent from a year ago to 475,050 tonnes due to a stronger rupee. “We have to raise prices considering (the) rising rupee and tight supplies of paddy rice,” said another exporter based in Kakinada. The rupee has risen 5.7 percent so far in 2017 and is trading near its highest level in 21 months. A strong rupee trims returns for exporters. (Reporting by My Pham in HANOI, Patpicha Tanakasempipat in BANGKOK, Rajendra Jadhav in MUMBAI, and Ruma Paul in DHAKA; Editing by Biju Dwarakanath)

Vietnamese rice prices in May hit their highest in over a year

Prices in Vietnam near 2.5-year high * Thailand jumps to highest level in almost 1 year By My Pham HANOI, June 1 Strong demand from top importing countries has led to a spurt in Asian rice prices, with the grain being quoted at its highest in nearly two and a half years in Vietnam and touching almost a year-high in Thailand, traders said on Thursday. Vietnam’s 5-percent broken rice RI-VNBKN5-P1 was quoted at a level unseen since December 2014, at $390 a tonne, FOB Saigon, up from $360-$380 last week, as suppliers looked forward to export deals, traders said.

However, trade in Vietnam was thin despite higher prices as traders and farmers hold on to stocks expecting a further jump in prices. “People expect prices to rise to $400 and even more, so they don’t want to sell now. Traders want to wait and see,” said a trader based in Ho Chi Minh City. Bangladesh said it will buy 250,000-300,000 tonnes of Vietnamese rice immediately and plans to increase rice imports from Vietnam to 500,000 tonnes by end-2017. It will also buy one million tonnes of Vietnamese rice annually until 2022. Meanwhile, the Philippines also said it would issue a tender next month to import 250,000 tonnes of the grain from Thailand and Vietnam, and possibly also India. Likewise, prices also jumped in Thailand and India, the world’s first and second biggest rice exporters, respectively. Thai benchmark 5-percent broken rice RI-THBKN5-P1 rose this week to $430 a tonne, free-on-board (FOB) Bangkok, from $411-$412 last week, the highest level in almost a year. Thai prices have risen sharply since April, leading to a greater gap over prices in Vietnam, Thailand’s main competitor, but traders said they have not yet lost buyers. “The upward price trend continues normally as there is demand and purchases are made,” a trader in Bangkok said, adding that ships were still coming in to load the grain. Traders also said the price hike has started making the local grain too expensive for them to buy for export. “Exporters have to be careful, because local prices are higher now than when deals were made, making us fulfill shipments at our own loss,” another trader in Bangkok said, adding that some traders had shied away from fresh deals. Thai prices are expected to stabilize in the next few weeks, traders said. In India, the 5 percent broken parboiled rice RI-INBKN5-P1 jumped $15 per tonne to $413 to $416 on improvement in demand and following a rally in overseas prices. “Export inquiries have risen in the past few days. Indian rice has become competitive as prices are rising in Thailand and Vietnam,” said an exporter based in Kakinada in the southern state of Andhra Pradesh. In the last few months Indian exports had slowed down due to an appreciating rupee and as local paddy prices rose, eroding the competitiveness of exporters. The rupee has risen nearly 5 percent so far in 2017 and is trading near its highest level in 21 months. A strong rupee trims returns of exporters. “At the current price level we can sign export deals. African buyers have stared purchases,” said another exporter based in Kakinada. (Reporting by My Pham in HANOI, Patpicha Tanakasempipat in BANGKOK, Rajendra Jadhav in MUMBAI; Editing by Sunil Nair)

May 25 Vietnam rice hit its highest level in over a year this week on potential export deals and prices in Thailand firmed up as supply eased, while the Indian variety gained on growing demand from Africa, traders said. Expectations of strong demand from top importing countries such as Bangladesh and the Philippines are fuelling the uptrend in Vietnam and Thailand rice prices. Vietnam’s 5-percent broken rice RI-VNBKN5-P1 was quoted at a level unseen since April last year, at $360-$380 a tonne, FOB Saigon, up from $365-$370 last week, as suppliers eyed export deals, traders said. Bangladesh said on Tuesday it will buy 250,000-300,000 tonnes of Vietnamese rice immediately and planned to increase rice imports from Vietnam to 500,000 tonnes by end-2017. It will also buy one million tonne of Vietnamese rice annually until 2022. The Philippines said on Monday it would issue a tender next month to import 250,000 tonnes of the grain from key suppliers Thailand and Vietnam, and possibly also India. Thai benchmark 5-percent broken rice RI-THBKN5-P1 firmed this week to $411-$412 a tonne, free-on-board (FOB) Bangkok, from $385-$411 last week, the highest in nine months. “Prices have strengthened greatly, and supply is running low while demand remains constant,” a trader in Bangkok said. But traders in Thailand and Vietnam said the price hike has started making the local grain too expensive for them to buy for export, raising a possibility for short supply in the market. “After the Bangladesh news, I can no longer buy anything,” said a trader in Ho Chi Minh City. “The market is really stressed already, even though there’s no real trade,” another trader said, referring to the Bangladesh deals. Thailand and Vietnam are the world’s second and third biggest rice exporters. In India, the world’s biggest rice exporter, 5-percent broken parboiled rice RI-INBKN5-P1 jumped by $7 per tonne to $398-$403, on a slight improvement in demand and a rally in local paddy prices. “Export prices are going up, tracking rise in other countries. Demand has also improved from African buyers,” said M.Adishankar, executive director at Sri Lalitha, an exporter based at Kakinada in the southern state of Andhra Pradesh. In the past two months, there has been a sharp rise in Indian rates on government buying and as appreciation in the rupee caused a rally in local paddy prices. “Rising paddy price in the local market has been forcing us to raise export prices,” said another exporter based in Kakinada. Global rice prices are likely to go further up due to demand from Bangladesh, Dhaka-based traders and government officials said. Earlier this month, Bangladesh’s state grains buyer said the country will import 600,000 tonnes of rice. Bangladesh, the world’s fourth-biggest rice producer with around 34 million tonnes, could emerge as a major importer this year, as low stocks and soaring prices led the government to import the grain. (Reporting by Patpicha Tanakasempipat in BANGKOK, Mai Nguyen in HANOI, Rajendra Jadhav in MUMBAI, Additional reporting by Ruma Paul in DHAKA; Editing by Vyas Mohan)

There are some positive signs for rice exports after a period of lull, the Viet Nam Food Association has said.

Farmers in Dong Thap Province harvest summer-autumn rice and sell at rather good prices. 

According to Huynh The Nang, its chairman, the Philippines plans to import 250,000 tonnes to augment its buffer stock for the lean months. Bangladesh plans to import around 600,000 tonnes, including 50,000-100,000 tonnes of white rice and the rest parboiled rice, to offset crop damage caused by torrential rains. Some companies have won tenders to export 40,000 tonnes of the grain to Malaysia, he said. Viet Nam’s exports recovered somewhat in April after a big slump in the first quarter, according to a report by the association. Exporters shipped 509,628 tonnes last month for free-on-board value of US$228.9 million, a year-on-year increase of 14.6 per cent in volume and 9.75 per cent in value. Export earnings in the first four months were $701.1 million, a 10.62 per cent fall. China was the biggest buyer of Vietnamese rice in the first four months followed by the Philippines, Cuba, Ghana, and the Ivory Coast. Exports of high-grade white rice surged, accounting for nearly 33 per cent of total exports. Exports of glutinous and Japonica rice also went up sharply in the first four months, but shipments of low-and medium-grade varieties plunged. The association said the number of export contracts signed in April increased significantly after prices fell, making Vietnamese rice more competitive than others’. Thailand’s rice inventories have fallen and prices have risen, which could bring back last year’s price gap of $40 per tonne with Vietnamese rice, according to the association. Government-to-government deals are expected to shrink to very low levels as commercial export contracts dominate. According to the Department of Crop Production, farmers in the Mekong Delta had sown 950,000ha of summer-autumn rice. Nang said in some areas farmers had begun harvesting, and enterprises keep a close eye on harvests to buy paddy in time to meet new import demand. According to rice traders in Dong Thap Province, a kilogramme of OM5451 and OM4900 paddy in the field costs VND5,200-5,300, VND250 – VND300 higher than a year earlier.

However, it remains to be seen if Vietnamese businesses can take advantage of this opportunity as the EU has strict technical barriers, according to Lam Tuan Anh, Director of Thinh Phat Ltd Co. Only firms which have their own material areas and could control the quality of rice from cultivation to processing can access the market, Tuan Anh said, explaining that rice is a sensitive staple that is not included in many other free trade agreements. Despite being the world’s third largest rice exporter, Vietnam is still in the early stages of building an image in the EU. Experts said the EU is a promising market because of local consumers’ high living standards. Although only a few rice exporting countries compete in the market such as Myanmar, Cambodia and Thailand, they all have good quality rice, experts said, urging Vietnam to create a brand name for its rice. Vietnam’s Commercial Affairs Office in Sweden, Norway, Denmark, Finland, Iceland and Latvia, suggested Vietnamese businesses focus more on food safety to deliver their rice to Sweden and other Northern European countries. Vietnam’s rice exports to the region have remained limited in turnover and varieties, according to the office. Although demand for rice in Northern Europe is not huge, the region could be a promising market for Vietnamese rice if the country receives trade incentives and satisfies locals’ taste, a representative from the office said. Vietnam has a huge opportunity to export farm produce like rice, vegetable, fruit and honey to the EU. — BERNAMA

Up to 100,000 tonnes of Vietnamese rice will be shipped to the EU each year tax-free in 2018 following the Vietnam-EU Free Trade Agreement, helping local rice exporters penetrate the market.

Bangkok/Hanoi. Rice prices hit multi-month peak in Thailand and Vietnam this week on export prospects, while high rates in India kept buyers at bay, traders said on Thursday (18/05). Thai benchmark 5-percent broken rice rose this week to $385-$411 a tonne, free-on-board (FOB) Bangkok, from $387-$392 last week. At a mean of $398 per tonne, Thai rice prices hit their highest in nine months, Reuters data showed. Traders said as Thai exporters are still buying stocks to fill shipments, heightened expectations of more demand from some of the world’s top importers also helped prices to surge.

China, already the largest importer of Vietnam’s sticky rice, has emerged as the biggest buyer of Vietnamese fragrant rice, according to exporters.

VietNamNet Bridge – The Vietnam Food Association (VFA) has warned that it would be difficult to export rice in 2017. 

HANOI, April 14 (Xinhua) — Vietnamese rice exports continued to face numerous challenges in the first quarter (Q1) of 2017 when the country has seen its rice exports sharply plunging since 2013, local media reported on Friday.

Official statistics showed that in the 2009-2013 period, Vietnam was among the world’s three biggest rice exporters. In 2012 in particular, Vietnam surpassed Thailand to become the world’s top rice exporter with over 7.7 million tons. However, since 2013, the country’s rice export volume has been on the downward trend, posting the seven-year low in 2016 with nearly 4.9 million tons of rice sold abroad. According to the Ministry of Agriculture and Rural Development (MARD), in Q1, Vietnam shipped around 1.28 million tons of rice to the world market, earning 566 million U.S. dollars, down 18.1 percent in volume and 17.3 percent in value year-on-year. The Q1 average rice export price hit 426 U.S. dollars per ton, down 1.6 percent year-on-year. The decline in Vietnam’s rice exports was blamed on the decrease in its key traditional markets, including China and the Philippines, reported local Vietnam Economic Times (VET) on Friday. Although China is seen as the “salvage” for Vietnam’s rice exports, and it continued to top Vietnam’s rice importers, Vietnam saw negative signals in rice exports to China in Q1 as China lifted its rice standards imported from ASEAN countries, including Vietnam. Accordingly, since Jan. 1, 2017, only 22 Vietnamese companies have been qualified to export rice to China. In addition, Thailand is discharging its rice inventory, which has lowered global rice prices, while the Philippines, one of the key markets of Vietnamese rice, recently announced that it would stop rice imports to protect the domestic production, said the Vietnam Food Association (VFA) on local CaFeF online newspaper on Friday. Addressing the possible inventory of Vietnamese rice amid the sluggish market situation and the current peak harvest time for Winter-Spring crops in the country’s southern Mekong Delta, VFA has urged local firms to develop the domestic market by building high-quality rice brands to meet with demands of domestic consumers as well as reduce the export pressure. To facilitate the rice branding, VFA proposed the Vietnamese government to reduce the value added tax imposed on local firms from five percent to zero percent in the next 5-7 years, reported VET.

Vietnam vows to develop national rice brand

Thai rice worries Vietnamese exporters

Thailand’s plan to sell all its rice reserves of about eight million tonnes this year has sparked concerns that this move will undermine Viet Nam’s rice exports. Customers buy rice at the Big C supermarket, Long Bien district, Ha Noi. Vietnamese rice businesses are now focusing on the domestic market instead of exports.    Nguyen Van Don, director of Tien Giang-based Viet Hung Co Ltd, said rice exports were positive last month, with many contracts signed. But starting early last week, trading tended to slow, he said, adding that his company has not had any new export contracts. He attributed this to the higher prices of Vietnamese rice compared to last month, and to Thailand’s plan to sell all of its rice stockpiles. Dang Thi Lien, director of Long An Foodstuff Co Ltd, said the price of Vietnamese five per cent and 15 per cent broken rice was US$5-10 a tonne higher than the same kinds of Thai rice. To compete with Thai rice, Vietnamese traders should lower their export price, but domestic rice prices are on the rise, even higher than export prices, making it hard for traders to compete abroad, she said. Huynh The Nang, chairman of Viet Nam Food Association, said “It will be hard to compete with Thailand in exporting white rice due to our less competitive prices.” Vietnamese firms previously exported a lot of white rice to Africa, but now firms are only exporting fragrant rice to the market, he said. “Thailand’s determination to sell all of the rice in stockpiles in the first half of the year will continue to adversely affect Viet Nam’s rice exports. Viet Nam’s export rice prices are predicted to drop further this year. Only when Thailand’s rice stockpiles are sold out can the rice export market recover,” he said. Domestic market Viet Nam produces about 44-45 million tonnes of paddy a year, equivalent to 22-22.5 million tonnes of rice. Domestic consumption accounts for about 15-16 million tonnes a year, and the rest is for export. Despite being one of the world’s largest rice exporters, Viet Nam’s high-grade rice segment is dominated by foreign brands. Nang, who is also general director of the Viet Nam Southern Food Corporation (Vinafood 2), said many domestic rice enterprises have implemented strategies to promote their rice brands as well as boost consumption of their products in the home market. Enterprises have established their own farm and production facilities and are focusing on improving the quality of their rice to international standards as well as building brands for their products. Last December, Tien Giang Food Company introduced to the market four to five new rice brands, which are produced following hygiene and food safety standards and are able to enter the US market. In the case of Song Hau Food Company, a member of Vinafood 2, thanks to actively promoting its rice brands and expanding its distribution system, the company last year doubled its domestic sales revenue from 2015, he said. Other companies, such as Dong Thap Food Company and HCM City Food Joint Stock Company, have actively improved their distribution systems, he said. Consumption volume of Vietnamese rice in the domestic market is expected to increase significantly in the coming time, especially as more and more rice is produced following hygiene and food safety standards. In addition, programmes to enable consumers to trace the origin of rice will be sped up this year, he said. Pham Minh Thien, director of Dong Thap-based Co May Private Enterprise, said: “We have a market of more than 90 million people. This is a very good foundation for us to deal with the supply and demand dynamic of the rice market.”