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Rice exporters urged to reconsider trade strategies

Update: February, 29/2012 - 09:43

Bui Chi Buu, director of the Institute of Agricultural Science for the South, spoke to Viet Nam News about the need for new trade strategies for rice exporters

What are the main difficulties for rice exports this year?

It would be the drop in rice prices on the world market. Prices have fallen in recent months since several countries with large grain stocks like India have increased sales to clear their stocks.

According to the United Nations Food and Agriculture Organisation, the international rice trade this year was forecast to fall to 31 million tonnes from 34 million last year, meaning that there was a decrease in rice demand this year.

But global rice stockpiles are expected to jump to 151 million tonnes this year, compared to about 100 million tonnes a year on average, previously. Therefore, any country that decides to clear its stock will affect the world rice price.

However, for the long term, the world rice price will not return to US$300 per tonne as it was previously.

Food demand in the long term will not fall because the population will increase while the area of cultivated land will shrink.

Which objectives should be followed: food security or exports?

In my opinion, we should place food security at the the top priority because this would be best for sustainable and stable development.

We should not focus too much on exports and forget long-term food security. We should not expand cultivation for rice and increase crops, which will destroy the ecological balance, affecting rice production for generations to come.

Exports consider this way of regulating prices. So we will try to maintain our exports to 5-6 million tonnes a year to stabilise domestic rice prices and ensure stable incomes for farmers.

What do you think the country should do to have stable rice exports?

We must create prestige as well as good brands for Vietnamese rice. This means that we must change our strategy on rice trading.

Enterprises must link up with farmers, supporting them from the beginning stages of production.

Currently, we have developed many good models of rice production, including the model for large-scale rice fields. Rice produced under this model is of good quality and would be easy to promote as a brand.

If our rice has a level of prestige and is a name brand likes Thai rice, we will not fear anything because Thai rice prices also go up and down, but fluctuating around a price axis that is safe for farmers.

Many experts have said that Viet Nam should increase cultivation of fragrant rice. What do you think?

Currently, the world demand for all kinds of rice is about 30 million tonnes per year. Demand for fragrant rice accounts for less than 10 per cent or about 2-3 million tonnes.

Thailand has dominated the fragrant rice market, providing about 1.5-1.8 million tonnes annually, and India and Pakistan supply a combined 300,000-400,000 tonnes. So there is a very small door for Viet Nam to enter this segment.

The main markets for fragrant rice are mainland China, Singapore, Taiwan, Hong Kong and Myanmar. As for the European market, they do not accept flavoured rice products but mainly consume high-grade, long-grain rice.

For low-grade rice, we face fierce competition from India.

Our white and long-grain rice is very competitive compared to those of other rice suppliers, including Thailand. This segment accounts for 60 per cent of the world rice trade.

So I think that we should invest in the middle-grade rice segment to enter supermarkets in the EU. This is a safe investment direction . —VNS

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