Boosting rice exports to high-quality markets

Thursday, 2017-02-09 11:29:54
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NDO - It is good news for Vietnam’s rice sector that it has secured export contracts with the Philippines and China in early 2017, but the country needs to look further and seek to boost exports to other markets that require high-quality rice.

According to the Ministry of Industry and Trade, a rice contract signed in 2010 between Vietnam and the Philippines has been renewed until the end of 2018, helping Vietnam to maintain its share in the Philippines’ rice market because the Southeast Asian country mainly imports rice through government bidding. With the renewal, Vietnam will supply 1.5 million tonnes of rice to the Philippines annually. In January nearly 20,000 tonnes of Vietnamese rice was also shipped to China.

These are good signals, as Vietnam’s rice sector was struggling in 2016 with sharp falls in both export volume and value. But the Vietnam Food Association says excessively high expectations should not be placed on these bright spots because the Philippines has long been an established market for Vietnam’s rice. And China, despite having licensed 22 Vietnamese rice exporters, also requires rice to meet stringent food safety standards.

Meanwhile, global rice output for the 2016-2017 crop is projected to reach a record high of 480 million tonnes of milled rice, up 1.6% from the previous season, which will lead to the highest inventory level since 2001 and consequently reduced import volumes and rice contracts.

Therefore, Vietnamese exporters should scramble from the start of the year to export rice to new markets, especially those demanding high-quality rice, because there is still much room for Vietnamese rice in these markets. Currently, high-quality fragrant rice accounts for only 29% of Vietnam’s total rice exports. And if Vietnam wants to increase this figure, there is no other way than improving its rice quality, safety and origin traceability.

Now many individuals and enterprises in Vietnam are seeking to produce organic rice to meet the market’s increasingly strict requirements. This is the right path, which needs support from the government in terms of incentive policies, credit and trade promotion. At the same time local authorities should proactively encourage farmers to grow high-quality varieties to increase the opportunity for Vietnam’s rice to be accepted in demanding markets like Japan and the US. With premium rice, Vietnam can substantially reduce its reliance on traditional markets and still maintain rice exports in a sustainable manner without having to chase after output every year.