Vietnam's rice exports drop in 2013 amid falling demand
Vietnam's rice exports are forecast to fall by around 15 percent in 2013 to 6.6 million tons after d…Vietnam's rice exports are forecast to fall by around 15 percent in 2013 to 6.6 million tons after demand plunged in Southeast Asia, local Vietnam News reported Thursday, quoting sources from the Vietnam Food Association (VFA).
At a seminar held recently in South Vietnam's Ho Chi Minh City( HCMC), VFA General Secretary Huynh Minh Hue reported that the average rice export price in 2013 was 430.89 U.S dollars per ton, down 14.5 dollars from last year, as exports fetched 2.64 billion dollars.
The VFA official blamed the situation on the fall in demand in some traditional markets in the second half of the year, reported Vietnam News.
Accordingly, Indonesia did not buy at all while the Philippines and Malaysia reduced imports of Vietnamese rice. But an increase in exports via border trade with China compensated partly and enabled farmers to sell their products.
In 2014, Vietnamese rice exports would face difficulties due to lower prices for Thai rice and stiff competition from some other major suppliers in Asia. With supply exceeding demand, rice prices could continue to fall for some time.
The VFA official warned that Vietnam should be prepared for fierce competition, especially with Thailand, in exports of white and fragrant rice as Thailand has competitive advantages in export of fragrant and high-quality white rice to Africa and a geographical advantage in supplying the product to China.
According to VFA, despite falling demand in Southeast Asia, the region remains a major market with many government-to-government contracts. With competitive prices and freshly harvested grains, Vietnam would be more competitive when demand revives in those markets.
In light of the likely hurdles, the VFA forecast Vietnam's rice exports in 2014 to remain unchanged at this year's figure of around 6.5 to 7 million tons.
To reach the target, the VFA advised that measures must be taken to boost exports, including strengthening trade promotions in new markets, developing high-quality seedlings, and growing the varieties that are in demand in the market. In addition, setting new quality standards for, and strengthening quality checks of exports are required to safeguard the country's prestige.
The VFA and 13 provinces nationwide signed an agreement for cooperation in rice production and consumption, under which the association will advise farmers on using varieties of rice to grow in each region, buy their crops at market prices, revamp the rice trading system, and develop brands for the grains. Initially, 13 areas will be identified in the southern Mekong Delta for specifically growing rice.
In 2012, Vietnam harvested a record high in rice exports with over 7.7 million tons worth nearly 3.5 billion U.S. dollars. High- quality rice exports accounted for more than 46 percent of the total volume, and Asian markets consumed over 70 percent of Vietnamese rice exports, according to the Vietnam General Statistics Office.