The figures are the result of changes in the right direction, aiming to gradually reduce the volume but still stabiliseand increase the value of Vietnamese rice.
Good quality, increase of price and high profit margin
According to the Department of Agro-product Processing and Market Development, under the Ministry of Agriculture and Rural Development, Vietnam's exported rice structure saw a noticeable shift. White rice exports account for 51% of the total export revenue, while Jasmine and aromatic rice account for 32%, followed by glutinous rice and Japonica rice with 12% and 5%, respectively. Notably, low-quality rice accounts for only over 2% of the total export volume.
The average rice export value in the first ten months of this year reached US$504 per tonne, a year-on-year increase of 12.3%. At times, the price of Vietnamese rice was higher than competitors such as Thailand and Pakistan, from US$50 to US$100 per tonne, resulting in impressive export growth.
In addition, the rice trade witnessed a new trend with the gradual decrease of concentrated export contracts, while trade contracts increased. According to statistics, trade contracts reached 5.014 million tonnes, accounting for 88.54% of the total registered contracts and up 2.94% over the last year.
In order to meet the demand of high-quality rice, moreenterprises focused on clean, organic and nutritious rice. Farmers attached special attention to using high-quality rice varieties that are suitable for exports. Specifically, in the Mekong River Delta – a key rice growing area of the country, the proportion of fragrant and specialty rice varieties reached 22.41% in the 2018 summer-autumn rice crop, with high-quality rice accounting for 52.44%.
In addition, the rate of mechanisation in rice production was high, significantly reducing post-harvest losses. The large-scale paddy field models have been expanded in many localities; while the linkage between farmers and enterprises has created high-added-value products.
The year 2018 also witnessed the continuous increase of paddy rice and dried rice, therefore, the income of rice growers has increased, creating a driving force for them to participate deeper in the production chains and linkages with enterprises.
Prof. Dr. Vo Tong Xuan, an agricultural expert, said that the sharp change in the structure of varieties was the most important factor creating bright spots for rice industry this year. The shift is in line with the general consumption trend of the world.
Open policies, expanded markets
The Decree No.107/2018/ND-CP on rice export businesses was issued and took effect on October 1 to replace Decree No.109/2010/ND-CP. It was considered as a breakthrough in the mechanisms and policies on rice exports, removing difficulties and creating a favourable environment for enterprises to develop.
The open policies will promote the expansion of consumption markets. Vietnam’s rice exports are no longer dependent on China and other traditional markets such as Indonesia, the Philippines and Malaysia. Vietnam’s rice has entered difficult markets including the Republic of Korea (RoK), Japan, Australia, Singapore and the US. By the end of October, Vietnam exported 1.24 million tonnes of rice to China, a year-on-year decline of 39.2% in volume. However, the average export price of rice to this market was US$514.5 per tonne, up 15% over the same period last year.
Meanwhile, many kinds of specialty rice, even organic rice, from Vietnam have been popular in the world market, including the ST24 variety receiving the organ organic farming certification under standards of the US Department of Agriculture (USDA organic) and the European Union (EU). At the 9th TRT (Rice Trader) World Rice Conference in Macau (China) in late 2017, the 8724 variety was honoured as one ofthe top three best rice varieties in the world.
Dr. Nguyen Duc Thanh, Director of the Vietnam Institute for Economic and Policy Research, said that there will be more businesses promoting the production, processing and export of organic and clean rice under the customers’ requirements.
However, according to the Ministry of Industry and Trade, the key export markets of Vietnamese rice are Asia (60%) and Africa (22%). The country set a target of changing the proportion of exports to markets until 2030 as follows: 50% to Asia, 25% to Africa, 10% to America, 6% to Europe and 9% to other regions. The structure of exported rice will be shifted with white rice accounting for 25% and fragrant and specialty rice accounting for 40%, while organic rice, parboiled rice and rice with improved micronutrients accounts for over 10%.
In the near future, the development of the Vietnamese ricebrand, particularly high-quality varieties, should be enhanced. Accordingly, it is crucial to apply the production method in association with the sustainable product value chain. Rice producers and traders should strictly implement the requirements for high-quality products, such as standards on land and water, not using synthetic chemicals and inspections.
