Wednesday, 17 Jan 2018

Developing strategy for Vietnam’s rice export

Updated at Wednesday, 18 Oct 2017, 16:22
The Hanoitimes - In order for sustainable rice export, it is necessary to focus on some certain types of rice with high value for export, as well as to meet the demands in major markets.
This is the conclusion at the conference held by the Ministry of Industry & Trade on the development strategy for Vietnam’s rice export in period 2017 – 2020, with vision to 2030 on October 17 in Ho Chi Minh. 

According to the Agency of Foreign Trade, in the period of 2010 – 2016, Vietnam’s rice contributed to 15% of the total exported rice in the world to 150 countries and regions. Despite having achieved positive results, but there remain shortcomings in Vietnam’s rice export: high export volume but low value in return; no well-known brand available and not be able to meet the diversified demand of the market. The process of buying, processing and storing still have difficulties. 

With such limitation, and in order to facilitate rice export, developing brands for the products, on July, the Prime Minister Nguyen Xuan Phuc has approved the development strategy for Vietnam’s rice export in period 2017 – 2020, with vision to 2030. As such, in the period 2017 – 2020, the annual volume of rice export is estimated to be 4.5 – 5 million tons by 2020, with the average revenue of 2.3 billion USD per year. For the period of 2020 – 2030, the volume of rice export will be 4 million tons with the revenue of 2.3 – 2.5 billion USD.

Besides, it is necessary to restructure rice product for export, with the following objectives by 2020: basic white rice to medium quality white rice of 20%, high quality white rice of 25%; specialty rice, Japonica rice of 30%, sticky rice of 20% and high value rice products of 5%. By 2030, the proportion of basic white rice to medium quality white rice will be reduced to 10%, Japonica rice will be 40% and sticky rice will be 25%. 

In order to realize this strategy, in September, the Ministry of Industry & Trade has issued the plan to implement the the development strategy for Vietnam’s rice export in period 2017 – 2020. 

Many rice export companies agreed with the proposal in the development strategy, in which requires to focus on some certain types of rice with high value for export. It is also consistent with the aim of export to grow sustainably, at present, Vietnam export focuses on growing in quantity, which has a certain limit to grow. However, this cannot be a long term solution, as grow in quantity will not lead to sustainable development. In long term, Vietnam need to focus on stabilizing production and increasing added value.  Besides, export activities should go in the direction of increasing in quality and the objective of socio-economic development in poor areas, as well as raising the living standard of citizens.

Moreover, rice export companies also need to meet the demands in major markets, as in reality, Vietnam has too many types of rice. With this being said, rice export companies need to clearly identify high potential markets and specific demands of these markets on what kind of rice, the requirements for quality, and others to have specific plan for production and distribution. 

As of present, countries in Asia and Africa are the main import market of Vietnam’s rice, with China contributes to 40% of Vietnam’s rice export. However, in this market, Vietnam’s basic white rice is under pressure in pricing with other countries. Meanwhile, Chinese customers are in favor of sticky rice. As such, Vietnam need to take advantage of the customers’ behavior, as well as the support of the government in trade negotiation and free trade agreement signed between Vietnam and China to increase export volume into this market. 

Moreover, it worth mentioning the effort from the government in administrative reforms and removing difficulties for enterprises, which are in forms of discarding barriers and simplifying administrative procedures. Though the current situation is showing that it is a long term effort, but with the preliminary result, Vietnam has partially success and received positive responses from the business community. Besides, Vietnamese goods and products such as textile & garment, shoes, smart phones, computers are increasing as a result of increasing demands for these products in the global market.
Ngoc Thuy
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