Vietnam will face severe competition in 2014 due to reduced prices in the world’s rice market as Thailand keeps lowering its selling price and competition between exporters in Asia still remains, according to the Vietnam Food Association (VFA).

At a meeting to implement a working 2014 rice production plan held in Ho Chi Minh City on January 9, the VFA warned that domestic products now have to vie with Thai fragrant and white rice and Indian basmati, parboiled and broken rice.

According to the association, Vietnam has a competitive edge in the African, Southeast Asian and some Asian markets, especially China, with high quality white and fragrant rice.

Despite reduced volume, Southeast Asia is still Vietnam’s traditional market with concentrated contracts, the food body confirmed.

Exports to China, especially cross-border trade, will increase, turning it into the largest Vietnamese rice importer, it added. However, it also warned of hidden risks from this market, which purchases Vietnamese rice at low prices.

To deal with the challenges, the VFA will take appropriate measures when dealing with markets through concentrated contracts which ensure a certain market share and export level.

It will also strengthen trade promotion, especially to emerging markets, and prepare to enter the US and Japanese markets after the negotiations of the Trans Pacific Partnership finally finish.

The association will develop high yield rice varieties to meet the market’s demand as well as build a brand name for Vietnamese rice.

According to rice producers, the Ministry of Agriculture and Rural Development and the Ministry of Industry and Trade should have a development strategy for the rice industry and control chemical residues in export products to enter such choosy markets as the US, the EU, Japan and the Republic of Korea.

Due to the anticipated difficulties facing the market in 2014, the VFA plans to export 6.5-7 million tonnes of rice, equivalent to 2013’s amount. It is expected that the country will export about 1.2 million tonnes of rice in the first quarter of the year.

Last year, Vietnam shipped 6.681 million tonnes of rice, a year-on-year decline of 13.45 percent.-VNA