Consecutive orders, rice export breakthrough growth

The objective advantages from the export market as well as efforts to diversify the products themselves, meeting many different segments have helped Vietnam's rice exports have a breakthrough in growth earlier this year. It is expected that in 2020, rice exports will be confident of "reaching the target" of 6.5-7 million tons.

Rice exports are seeingmany advantages in terms of the market.Rice exports are seeingmany advantages in terms of the market.Photo: Nguyen Thanh.

Rice prices adjust by week

The Ministry of Agriculture and Rural Development has been working closely with ministries, branches and localities to focus on directing the implementation of solutions, ensuring the rice production plan set out as well as the projected rice output this year.

Specifically, in the first six months of the year,all winter-spring rice crops of the whole country will be harvested, the estimated output is about 20.1 million tons of paddy, of which the northern provinces are 6.9 million tons and the south is 13.2 million tons. In the last six months of the year,all summer-autumn, winter-autumn and winter-autumn rice crops nationwide are harvested with expected output of 23.4 million tons of paddy, of which northern provinces account for6.2 million tons, and southern provinces 17.2 million tons.

Since the beginning of the year, while a series of key agricultural products of Vietnam have faceddifficulties, the export value has decreased significantly, but the rice product has the opposite direction.

Unable to hide hisexcitement, PhanXuanQue, Chairman of the Board of Members of the Northern Food Corporation (Vinafood 1) saidthat the processing and export of rice has become a bright spot for exports in the context of common difficulties of the Agriculture sector. According to the latest statistics of the Ministry of Agriculture and Rural Development, the export of rice in the first two months of the year reached 890,000 tons and the export value reached US$420 million, respectively up 27% in volume and up to 32.6% in value over the same period in 2019.

"In the two years of 2018-2019, the fierce competition from emerging rice markets such as India and Myanmar has made Vietnamese rice seeds struggling to assert their position. The results achieved earlier this year are what businesses from years to wish," Que said.

Vinafood 1's leaders emphasized: "The rice market after Tet holiday has become unprecedentedly vibrant. Export rice prices have increased rapidly and steadily in all products and segments, not only in the high-quality products. Notably, the time of price adjustment is fast. For the first time, the price of export rice is adjusted by week, not by month or quarter as usual."

Why is exporting rice "upstream", not in a difficult situation with other agricultural products? To clarify this issue, Que assessed that the key point is that the Chinese market, which dominates the world's three million tons of rice, is forced to restrict exports due to the Covid-19 epidemic situation. Besides, the "rival" market of Vietnam, Thailand, is seriously affected by drought, so it is forced to reduce the target of rice export. These objective factors have led countries to increase Vietnam's rice imports.

Some experts recognize that, besides the objective advantage from market demand, the subjective factor due to product diversification, can provide many product segments to the market is also a contributing factor to the manufacturing industry and rice exports make good use of opportunities opened earlier this year.

Striving to export 7 million tons

Regarding the situation of rice export, the Ministry of Industry and Trade stated that Vietnam's rice export in 2020 has many favorable factors. Global trade in 2020 is expected to be 46 million tons. Although the markets such as Bangladesh, China, Nigeria and Sri Lanka, the US Department of Agriculture (USDA) are forecasted to import less, but the USDA forecasts that rice imports will increase in the Philippines, sub-Saharan Africa and Indonesia.

Notably, the Vietnam-EU FTA (EVFTA), expected to take effect in July 2020, will also open up many opportunities for Vietnamese rice. Taking advantage of the quota of 80,000 tons of rice/year that the EU has for Vietnam will be a good opportunity for Vietnam to narrow the disadvantage in competition (with Thailand and Cambodia) and expand this high-class rice market. In the case of making good use of the EVFTA, in the second half of 2020, Vietnam can export 40,000 tons of rice in tariff quotas and 100,000 tons of broken rice to the EU.

In a report to the Prime Minister on the implementation of the rice production plan for 2020 on March 17 of the Ministry of Agriculture and Rural Development, the Ministry of Agriculture and Rural Development stated that in 2020, striving to achieve the rice output of 43.5 million tons, an increase of about 80,000tons compared to 2019, ensuring sufficient domestic consumption and exporting about 6.5 - 7 million tons of rice.

Deputy Minister of Agriculture and Rural Development Le QuocDoanh said that in order to reach the output of 43.5 million tons of paddy, the country must maintain a minimum of 7,364 million hectares of rice in 2020, a decrease of about 115,000hectares compared to 2019 due to plant restructuring and impacts of saline drought; productivity must reach 59.3 quintals/ha, an increase of one quintal compared to 2019 to compensate for the reduced area.

Although there are many favorable factors in exporting, the Ministry of Industry and Trade also noted, the global market currently has no signs of prosperity due to widespread disease in China. The evolution of the Covid-19 epidemic is the reason that affects the ability of China to export rice and the ability, demand and timing of Chinese rice imports. Demand from China (in both imports and exports) will affect world market prices as well as domestic prices.

In order to promptly cope with the impact of the Covid-19 epidemic in the future and promote rice exports, the Ministry of Industry and Trade proposed to the Prime Minister to assign the Ministry of Agriculture and Rural Development to monitor and developstatistics on the situation of production, structure, source of paddy and commodity rice according to each type andcrop of the year and regularly updated with the Ministry of Industry and Trade, Vietnam Food Association and provincial People's Committees to orient the production and balance of rice and rice sources for export goods.