Exports facing a tough time due to a range of factors.
Rice exports in February are estimated at 200,000 tons worth $90 million, according to figures from the Ministry of Agriculture and Rural Development (MARD). Exports for the first two months are therefore estimated at 526,000 tons worth $243 million, marking a decline of 33.2 per cent in volume and 34 per cent in value year-on-year, the biggest fall in more than 12 months.
Meanwhile, the average export rice price in January was $470.50 per ton, a 1.6 per cent decline compared to January 2014. A leader at a major rice exporter in Ho Chi Minh City acknowledged that rice exports in the opening months of the year have been gloomy, with small new export contracts mostly signed in 2014. The Vietnam Food Association (VFA) has forecast many changes in the market during 2015.
China has always been Vietnam’s largest rice importer but in the near future it will strictly control cross-border imports and increase imports from official low-cost sources such as India, Pakistan and Myanmar. The major rice exporter mentioned previously had one or two orders from China early last year but now has none.
Africa remains the second largest recipient of Vietnamese rice but last year Vietnam lost approximately 60 per cent of the market to Thailand and India. Thailand is likely to continue to dominate the market this year due to its price advantage, though Vietnam will retain its market share in fragrant rice and rice specialties.
Taking account of these factors, this year is likely to be a tough time for Vietnam’s rice exporters. “Though it is already early March there are still no signs of new contracts,” said Mr. Huynh Minh Hue, General Secretary of the VFA. “Export targets for the first quarter may not be reached.”
Some exporters have fared much better. According to Mr. Nguyen Tho Tri, Deputy General of the Vietnam Southern Food Corporation (Vinafood 2), at the start of this year it signed a contract to export 300,000 tons of rice to the Philippines and has also provided 30,000 tons to Malaysia. Generally speaking, however, he said that Vietnam’s rice exports have been greatly affected by moves in the Chinese market.
The VFA is currently trying to maintain market regulation at a reasonable level and to protect the interests of farmers to the maximum extent possible. MARD is also striving to reduce pressure in consumption and market stability and create the conditions to purchase rice from farmers to ensure profitability. In early February the government temporarily stored 1 million tons from the 2014 - 2015 crop in the Mekong Delta, under a proposal from MARD.