Forecasted low trade, domestic strict requirements make rice exporters careworn

Forecasted low trade, domestic strict requirements make rice exporters careworn

Vietnam still strives to export 7 million tons of rice in 2012. However, this proves to be not an easy mission, especially when enterprises meet big challenges in both the domestic and foreign markets.

Vietnamese rice exporters put under pressure

Big trade centers in the world all have released a message that the rice inventories in Asia have been increasing sharply, while the demand from big markets has been decreasing, which would result to the sharp fall of the rice price in the last months of the year.

Vietnam’s 25 percent broken rice is offered for sale at 377.5 dollars per ton, decreasing by 16 percent in comparison with earlier this year.

Most recently, the London based International Grains Council has predicted that the rice trade volume in the world would drop by 4.7 percent in comparison with 2011 to 34 million tons. It is because big importers now tend to restrict the imports thanks to the good weather, which allows them to produce enough rice for domestic consumption.

According to Thoi bao Ngan hang, the Philippines, the rice biggest importer in 2010, after restricting the import volume in 2011, has been striving to supply food itself to its citizen by 2013.

While the demand is decreasing, the supply is getting profuse. Thailand, the biggest rice exporter in the world, now has 10 million tons of rice in stocks, which is equal to 1/3 of the total global trade volume. Indian inventories had reached 30.7 million tons by July 1, which is enough to satisfy the world’s demand for nearly one year.

Vietnamese rice exporters have been on tenterhooks amid the information. The Vietnam Food Association (VFA) has foreseen that Vietnam would have to compete fiercely with Bangladesh and India in terms of low quality rice, while it would have to struggle with Thailand to scramble for clients who buy high quality rice products.

Though Vietnam had exported 3.41 million tons of rice in the first six months of the year, exceeding the targeted level of 3-3.2 million tons, this does not mean that Vietnam can be sure of the export volume of 7 million tons this year as initially planned.

The demand from loyal markets has been decreasing significantly. Indonesia still has not had the demand concentrated rice imports. The Philippines have been importing rice in dribs and drabs. Meanwhile, Africa is not a lucrative market, because Vietnamese have to compete with Indian there. China, the biggest importer in the first six months of the year, has stopped making orders. Vietnam’\s rice export prices are the lowest in the world.

Rice exporters build storehouses and tremble with fear at the same time

While the export has been going very slowly and the export price has been decreasing, which means no big profits for rice exporters; they still have to spend money to build storehouses as required by the Ministry of Industry and Trade.

The watchdog agency has decided to cut the number of rice export companies, saying that 100 would be a reasonable figure. Rice exporters must satisfy a lot of requirements in terms of capital capability and material facilities in order to obtain the right to export rice.

They have to prove to the watchdog agency that they have the husking line with the capacity of 10 tons per hour at least, the storehouse system with the capacity of 5000 tons of rice at minimum and the drying system which can meet the strict requirements set up by the ministry.

The work must be completed prior to September 30, 2012, which means that enterprises have no much more time to make investment.

Mai Thi Anh Tuyet from the An Giang provincial agriculture department also said on Dat Viet that while enterprises have to move heaven and earth to seek capital to maintain production, they would not be able to arrange money to build storehouses and material facilities.

vietnamnet