14/01/2011 | 16:17:10

Vietnam to reduce rice exports in 2011

The Vietnam Food Association (VFA) has estimated that the country would export a total of 6 million tonnes of rice this year, 750,000 tonnes less than last year.

The association planned to ship the largest volume accounting for 61.29 percent to Asian countries and 29 percent of the total to African countries.

It would monitor rice export activities carefully to maintain an export price similar to that of last year, said Truong Thanh Phong, VFA chairman.

Bui Ba Bong, deputy minister of Agriculture and Rural Development, said that this year, besides high-quality rice, exporters would focus on processing medium-quality rice for the African market where there was little demand for the more expensive variety. Meanwhile, VFA members would purchase 1 million tonnes of both the winter-spring and summer-autumn crops in a bid to stabilise the price.

With global demand for rice expected to rise, 2011 is likely to be a good year for Vietnamese rice exports although an opening up of the grain market in line with trade commitments will pose new challenges to exporters.

According to the association, world rice demand will rise from 29 million tonnes last year to 31 million tonnes this year, with many countries announcing plans to increase their imports.

Phong said the success of last year was a positive factor that would encourage exports this year, but warned that there would also be difficulties for rice exporters as Vietnam had to open up its market to foreign traders under WTO commitments this year.

Foreign traders would be allowed to trade Vietnamese rice without entering into a joint venture with a domestic company, he said.

The change would benefit rice farmers but would be a challenge for exporters, he added.

To deal with the challenge, the Government issued Decree 109 to improve the competitiveness of the rice export industry so it could compete with foreign rivals.

Phong said only 30 out of 264 existing rice exporters met the regulations of the decree.

A glaring weakness in Vietnamese firms was their small size and limited funds compared to their foreign counterparts, he said.

It threw up the possibility that many Vietnamese exporters would be forced to turn into local suppliers for foreign partners, he added.

"Meanwhile, if they want to compete with foreign rivals, they must improve stock and processing technology, equipment, agricultural investment and co-operation with farmers," he said. Last year, Vietnam exported 6.75 million tonnes of rice worth 3.23 billion USD, a record high export volume, according to the VFA.

In 2010, the average export price of Vietnamese rice increased by 22 USD per tonne to 511 USD for 5 percent broken rice. For 25 percent broken rice, the price was 491 USD./.

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