Tuesday, January 29, 2008

Vietnam's rice exports strong but quality poor

Rice exports in 2007: good business but poor quality

VNECONOMY updated: 28/01/2008

Vietnamese rice has been exported to more than 70 countries and territories around the world including demanding markets such as the EU, the US and Japan. However, behind this impressive figure, the Vietnamese rice exporters are still beset by worries.

In 2007, Vietnam was in the “runner-up” position amongst the world’s rice exporters with the total rice output hitting approximately 36 million tonnes.

In the Summer-Autumn crop alone, localities across the country harvested nearly five tonnes/ hectare, reaching an estimated output of 10 million tonnes, up 430,000 tonnes from the 2006 figure.

According to the Ministry of Industry and Trade, the country exported 4.3 million tonnes of rice in 2007, grossing more than US$1.4 billion in export turnover. Furthermore, the price of Vietnamese rice was sold at an average of US$293/ tonne, US$42/ tonne higher than in 2006.

In early 2008, thanks to winning contracts to export around 4 million tonnes, Vietnam is still the second biggest rice exporters just behind Thailand.

The Ministry of Agriculture and Rural Development said that last year, rice farmers in the Mekong River Delta enjoyed a bumper crop, earning an additional VND2,100 billion at an average price of VND3,000 for one kg of rice.

Rapid development but lacking sustainability

According to scientists, rice output has seen a constant growth over recent years. However, ensuring the sustainability, safety and quality of rice products remains problematic due to post-harvest loss and poor rice quality as a result of long lying in store. The Mekong River Delta Rice Research Institute said that the volume of post-harvest rice lost is still at a high level of 10 percent.

In addition, to meet with market demands, finished rice products must be preserved at a humidity of less than 14 percent, which is applied popularly for long rice in the US, Australia and Thailand. However, Vietnamese rice after being husked, is stored in humidity between 16-17 percent. Therefore, if exported, it must be re-processed to reduce the humidity to 14 percent but this process results in broken rice, reduced quality and low prices.

Prof. Dr. Vo Tong Xuan who has spent many years studying rice in the Mekong River Delta said that Vietnam could win many more rice export contracts after its entry to the World Trade Organisation (WTO). However, its rice must be quality and sold at a competitive price. To compete with big rivals like Thailand, farmers should create close links with businesses and apply advanced cultivation technology.

Rice exports in 2008 will continue to see positive signs as businesses have won contracts to export 4 million tonnes this year but the crux of matter is how to increase the quality of Vietnamese rice to meet the global markets’ tougher demands.

Last but not least there should be closer cooperation among farmers, agricultural managers and businesses, which will enable Vietnamese rice businesses to secure a foothold in the world markets.

News updated

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