Following the difficulties in rice export in 2013, experts are suggesting that border trading could be a way for the sector to flourish in 2014.

According to the Vietnam Food Association (VFA), last year the country shipped abroad 6.68 million tonnes of rice for nearly 2.9 billion USD, down 1 million tonnes over 2012.

However, the actual rice amount that Vietnam sold to foreign countries, including through land border gates, was 8.2 million tonnes with nearly 2 million tonnes exported in small volumes through border trading.

According to Truong Thanh Phong, VFA Chairman, the difficulties encountered by Vietnamese rice exporters last year were due to decreasing demand from traditional markets in Southeast Asia. In the last six months of 2013, Indonesia ceased its rice imports, while a sharp drop was seen in the Philippines and Malaysia , he cited.

Furthermore, a high rice global inventory was another reason behind the drop in Vietnam’s export, he said, noting that Thailand’s 2013 inventory was about 5 million tonnes, while that of Indian was even higher.

In the context of dramatic decrease in imports in Asian markets, Vietnam still exported rice to China through border trade. However, this did not help much as foreign currency earned was low.

At the same time, Vietnamese enterprises still purchased rice with high prices in an effort to ensure at least 30 percent of profit for farmers, causing high export prices and decreasing Vietnamese rice’s competitiveness against Thailand and India .

Experts predict that rice export will still face difficulties in 2014 due to both price and quality, requiring changes in the rice sector.

According to Lam Anh Tuan, Director of the Thinh Phat Food Company from the Mekong Delta province of Ben Tre , together with official export method, border trade will also help Vietnam sell out its rice production.

Tuan proposed that the Government design more support policies allowing enterprises sell rice abroad through way of border trade when the inventory is high and global prices fall.

Sharing Tuan’s opinion, VFA Chairman Phong said despite difficulties posed by border trade with high risk of trade fraud as well as tax refund and balance, the method is also effective to ensure rice sales.

Besides, Vietnam needs to focus on developing its rice trademark in line with improving rice quality, he said, adding that the VFA will coordinate with rice institutes to choose Jasmine 85 as the official rice variety for high-grade exports in 2014.

VFA also suggested that authorised agencies in localities increase communications among farmers on decreasing the cultivation of low-grade varieties.

According to Dr. Pham Van Du, deputy director of the Department of Cultivation under the Ministry of Agriculture and Rural Development, the ministry instructed localities to limit the cultivation of low-grade rice varieties to 5 percent of total acreage, while encouraging enterprises to collaborate with farmers to develop rice material areas and form rice production chains to increase rice value.

Although Vietnam was strong in low-grade rice production, it should focus more on producing higher quality rice to enhance competitiveness and meet requirements of new markets of Latin American and European countries, said Duong Phuong Thao, deputy head of the Import-Export Department under the Ministry of Industry and Trade.

She revealed that the ministry is also strengthening trade promotion to help Vietnamese rice access new markets. The ministry also recommends enterprises to be more active in expanding rice material areas to produce high quality rice to ensure rice provision to partners.-VNA