Rice exporters face tough year
Rice exporters face tough year
Viet Nam's rice exporters face difficulties ahead, especially in the first quarter because of low demand in the global market and stiff competition among other exporting countries, according to the Viet Nam Food Association (VFA).
Speaking at a meeting in HCM City yesterday to set tasks for 2013, the VFA's deputy chairman, Pham Van Bay, said that businesses had exported a record high of 7.72 million tonnes of rice for a free-on-board (FOB) value of US$3.45 billion last year.
This represented an increase of 8.29 per cent in volume but a fall of 1.98 per cent in value compared to last year, due to lower export prices.
The average FOB export price in the period was $446.86 per tonne, a year-on-year drop of $46.85 per tonne.
"There was a big change in the country's rice exports last year since exports of high-grade and fragrant rice increased strongly compared to 2011 and accounted for nearly 54 per cent of total exports," he said.
Countries in Asia and Africa were the main buyers of Vietnamese rice, accounting for nearly 71 per cent and 21.7 per cent of the country's total export volume, respectively, he said.
Currently, rice inventories at businesses are about 787,000 tonnes, much lower than last year.
In general, last year was a difficult year for the country's rice exporters because of an abundance of supply and stiff competition from cheap rice sources in India, Pakistan and Myanmar.
"Viet Nam's rice trade is expected to face last year's situation again, when the trade was sluggish in the first quarter due to low demand," Truong Thanh Phong, VFA chairman, said.
"With fewer contracts in the first quarter, the rice export sector will face even more difficulties ahead," he said.
The traditional import markets of Vietnamese rice such as the Philippines, Indonesia and Malaysia are expected to import rice again but not in the first quarter, he said. With high inventories, countries in Africa will reduce rice imports this year, particularly in the first quarter.
India will continue to export rice but the export volume may be lower than last year's due to lower output from the 2012-13 crop.
"Because of higher purchase prices, Thailand has accumulated a large inventory. So any measure to clear its stock has also had a strong impact on the world rice market," Bay said.
"Asian and African countries will continue to be the main import markets of Vietnamese rice;" however, low-grade rice will have a difficult time entering these markets, especially Africa, since Vietnamese low-grade rice cannot compete with India's.
"The association will resort to flexible management measures in rice exports this year, and keep a close eye on changes in the world rice market,"Phong said.
"It will also provide enterprises with up-to-date information to help them overcome difficulties," he added.
Nguyen Van Tien, general director of Angimex, asked the Ministry of Agriculture and Rural Development and local authorities to instruct farmers to produce more "safe rice" so that Vietnamese rice quality will satisfy strict requirements demanded by markets such as Japan and South Korea.
Demanding market such as Japan has opened to Vietnamese rice, Tien said.
Enterprises asked the Government to quickly develop measures to stockpile 1.5 million tonnes of rice from the winter-spring crop in the first quarter to ensure profit for farmers.
They also asked farmers to increase the cultivation of high-grade rice in order to raise export value.
Pham Van Du, deputy head of the Cultivation Department, called on rice exporters to be more involved in large-scale rice field models by placing orders to buy rice produced at the model.
Viet Nam hopes to export about 7.5-7.6 million tonnes of rice this year, slightly lower than last year, with 1.4 million tonnes expected to be shipped in the first quarter.
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