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VietNamNews

Rice exports likely to fall this year

Update: February, 15/2012 - 11:25

HA NOI — Experts have estimated that Viet Nam would export 6.5 million tonnes of rice this year, 9.72 per cent down against last year because of challenges faced by the domestic and world markets.

Huynh Minh Hue, general secretary of the Viet Nam Food Association (VFA), said the country had exported 322,422 tonnes of rice from the start of the year until February 9. The total export volume of rice for the first half of the year is expected to reach 3.5 million tonnes.

For the whole year, Viet Nam is expected to earn US$3 billion from rice exports, a year-on-year reduction of 9.72 per cent in volume and 18.92 per cent in value.

The domestic rice market would undergo a tough time this year due to increased domestic rice output and upped world rice stocks that had climbed to a record high of 100 million tonnes against global rice trading activities that had been reduced by 5-8 per cent, Hue said.

He added that Viet Nam would ship 1.25 million tonnes of rice until the third quarter of this year based on export contracts signed last year.

The biggest problem was the slow export of rice, Hue explained.

In January, the country exported 280,000 tonnes of rice, 42 per cent down against the same period of last year.

Hue said the most important thing was the promotion of rice exports to reduce large stockpiles and the preparation for rice purchases during the coming harvest in March and April.

To promote rice exports, the country must offer competitive prices, quality and other export conditions, he stressed.

The VFA planned to promote exports of high-grade rice and limit low-grade rice that could not compete in price with Indian and Pakistani products, he noted.

Export prices of Indian and Pakistani low-grade rice currently stands at $350 per tonne while Vietnamese low-grade rice is on sale for $390 per tonne to ensure farmers' profit.

The VFA has also set up reasonable floor prices for export rice to promote high quality. It expected to increase the purchase of rice after the winter-spring harvest.

The Ministry of Industry and Trade recently expanded the deadline for meeting conditions related to rice export activities under Decree 109 by October 1, 2012.

However, enterprises are likely to struggle in meeting such conditions due to the lack of capital.

Vu Thi Thu Hanh, director of the Ngu Coc Viet Company, said they needed VND30-40 billion in investment for rice processing facilities and machines at a high interest rate.

No enterprises had however dared invest because of uncertainty about the future of rice exports, she said.

Other large companies such as Tien Giang Food were also likely to struggle in meeting the necessary criteria as set out by Decree 109, said Le Thanh Khiem, company deputy director. — VNS

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