In the first two months this year, rice export of Vietnam only achieved 711,759 tons, earned USD 311.59 million, respectively marking a decrease by 14.4% in quantity and 23.6% in quota in comparison with those in the same period in 2018. Rice export price has also been reported by enterprises with a fall to the average USD 424.4 per ton.
It is generally commented that there had been warnings about a fall in rice export when large markets such as the Philippines, Indonesia were gradually making changes in import policies, even the market which was regarded as “easy” one like China also has more and more stringent requirements on product quality, origin trace and prefers official import. In addition, markets such as the United States, the Europe have exclusively high standards,
if enterprises do not properly invest in material regions, plants and storages it will be very hard to compete.
Ms. Dang Thi Lien, Director of Long An Food Stuff Co., Ltd. is much concerned that rice export price has never been so low as of this year. Rice price continuously goes down, leading to the fall in the local purchase price, the profit margin decreases not only for enterprises but also for farmers. As a consequence of lower price, the company only exports more than 1,000 rice tons per month on average, equivalent to that every year (despite a profuse supply).
Under the aforesaid fluctuation of the market, it is generally believed that if the rice sector stands still without any change in production and processing method, it will be hard to compete in the market. Mr. Phan Van Co, the representative of International Vrices Co., Ltd. admits that rice export to markets such as the Middle East, the United States, Europe, etc requires higher and higher quality and other accompanying criteria while the majority of Vietnamese enterprises have not satisfied these criteria.
Therefore, many enterprises including those who are only specialized in local market must determine that there is a need of close association with farmers and of a complete processing plant in order to produce safe rice seeds of good quality for the health of consumers.
Many enterprises in the rice sector reveal, in the past year 2018 the Government, Ministries and Sectors have shown their concern with rice export by the issue of Decree No. 107/2018/ND-CP (referred to as Decree 107) on rice export business in replacement of Decree No. 109/2010/ND-CP. In the Decree, many regulations on storage and workshop are much more loosen. In addition, it is not mandatory to have rice milling line, investment area is not limited; there is only regulation that storage, milling facility, rice processing shall satisfy the standards and codes promulgated by the relevant State authorities. However, as previously mentioned, with more and more stringent requirements of the import market, many enterprises determine that they shall be professional by investing in storages and material regions as well as secure the conformity to standards and codes promulgated by the relevant State authorities. As in their opinion, although the State has “loosen the rope” the market is more and more demanding, so enterprises which expect to survive shall create a distinction and show importers their production is in conformity to codes and standards, invest in long-term development.
Ms. Lien said, under the guideline of professional, sustainable business, the company has built their own closed process from material regions to processing plants, storages, peeling process, etc. Hence, the company still “survives” thanks to rice purchase at reasonable price for reservation while there is a significant fall in rice price in the early 2019.
In the opinion of Mr. Pham Thai Binh, General Director of Trung An Hi-Tech Farming JSC. (in Can Tho city), despite the fluctuation and instability of rice market, the company has still been exporting more than 100 thousand high-quality rice tons every year for the past many years. It results from the matter of fact that Trung An Company has built material regions, specialized in a variety of rice for processing and export since 2011 up to now in the model of vast rice fields in provinces including Can Tho, Hau Giang, Kien Giang and Soc Trang. The achievement of Trung An and other enterprises has contributed to the introduction of vast rice fields to expand all over the country and to play important role in the agricultural restructure course in Vietnam.
Mr. Pham Minh Thien, General Director of Co May Co., Ltd. (in Dong Thap province) said his enterprise upgrades their own production line and workshops every year upon the demand of the market. Mr. Thien thinks that the rice seeds shall be produced for the consumers and their health, that helps the rice production survive and have firm position in the market.
(Sourced from Congthuong.vn)