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(VEN) - On March 2, a meeting was held in An Giang province to review rice exports in 2009 and discuss the rice purchasing plan for the 2009-2010 winter-spring crop. At the meeting, the Vietnam Food Association (VFA) forecasted that 2010 will see major changes in rice production output of countries such as the Philippines and India.
In 2009, despite adverse conditions due to the world economic crisis, Vietnam exported more than 6.05 million tonnes of rice, an increase of 29.35 percent compared to 2008. Export value amounted to US$2.46 billion (FOB price). The average rice export price was US$407.09 per tonne, and of total volume, high-quality rice accounted for 40.25 percent (2.43 million tonnes).
Also in 2009, the management of rice export activities improved, and the Government and relevant ministries provided businesses with timely instructions and updated information about market moves, which allowed them to make effective business plans in a difficult year. The relationship between VFA and rice exporting companies grew strong, though it needs to be continuously improved to grow consensus among rice export companies regarding purchasing activities to ensure farmers can sell their products on a timely basis.
In the opinion of Deputy Minister of Industry and Trade, Nguyen Thanh Bien, also head of the Rice Export Management Team, asserted that the VFA must maintain close coordination with localities to streamline the process of farmers selling rice. He insists that it is the association’s responsibility to ensure that farmers can sell all their products with profit levels of roughly 30 percent thereby allowing purchasing companies to make a profit and ensuring stability of domestic rice prices.
To guarantee food security in the time to come, VFA has arranged for 30 member companies to buy one million tonnes of rice (two million tonnes of paddy) for temporary reserve. The purchase began in late February 2010, which has helped stabilize rice prices in the Cuu Long (Mekong) Delta. If rice prices continue to fluctuate unfavorably for farmers, VFA will arrange for its member companies to buy even more rice for temporary reserve to stabilize prices. In defense of businesses, Pham Xuan Hue, the deputy general director of the Northern Food Corporation (Vinafood I) remarked that to promote rice sales, companies must upgrade storage facilities and seek out more markets and partners.
Keeping export price unchanged
According to the latest forecasts of the US Department of Agriculture, global rice production output in 2010 will reach 463.3 million tonnes, down 2.5 percent compared to 2009 while consumption will increase to 437.1 million tonnes, 2.2 million tonnes more than in 2009. In the opinion of experts, due to adverse impacts from the global economic crisis, the purchasing power on the rice market is likely to fall while rice prices continue to increase. This will lead to competition between producers of rice, but also other products such as wheat that can act as a substitute for rice.
The Ministry of Agriculture and Rural Development has sent Document 457/BNN-KH dated February 11, 2010, to the Prime Minister forecasting Vietnam's rice production in 2010. The Ministry said it expects that 11.54 million tonnes of paddy will be available for sale throughout the country in 2010 (not including 2009 surplus). The VFA-proposed rice export plan for 2010 is to export 1.2 million tonnes in the first quarter, 2 million tonnes in the second quarter, 1.5 million tonnes in the third quarter, and 1.3 million tonnes in the fourth. The Philippines, Malaysia, Cuba and Africa will continue to be the main export markets of Vietnamese rice.
For rice exports to be more effective, VFA must be more dynamic in its role as a representative for companies. The association should provide the Government with consultancy services related to rice exports to ensure effective management and oversight. Moreover, farmers, as well as rice exporting companies, must also be provided with updated information about the market and specialized growing areas would help improve quality. Lastly, rice exporters should not buy rice at prices lower than the minimum approved by the Government.
To implement the rice export plan for 2010, exporting companies must closely follow the instructions of the Government and VFA, and actively fight against dumping activities that result in losses for rice farmers and companies. Deputy Minister Nguyen Thanh Bien emphasized that rice exporting companies must maintain reasonable price levels so they can effectively compete with rival countries./.
By Nguyen Le
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