Rice exporters to face stiff competition
According to the Vietnam Food Association, world rice demand will rise
from 29 million tonnes last year to 31 million tonnes since many
countries have announced plans to increase their imports.
Indonesia did not import rice in 2008 and 2009 but bought 1.5
million tonnes last year and plans to import a similar volume in 2011.
Bangladesh too seems set to increase imports. Vietnam shipped
400,000 tonnes to the South Asian country last year and has signed deals
to export 250,000 tonnes in just the first two months of this year.
Malaysia has also indicated plans to import 800,000 tonnes in all
this year and the VFA hopes to sell half or more of this quantity.
Vietnamese rice exporters achieved record numbers last year, shipping 6.8 million tonnes of the grain for 3.2 billion USD.
Significantly, during certain periods last year Vietnamese rice prices
were equal to or even higher than that of comparable Thai grains.
Food Association chairman Truong Thanh Phong said the export successes
of last year are positive factors that will encourage exports this year.
But he warned: "There will also be difficulties for rice
exporters this year since Vietnam has to open up its rice market to
foreign traders under its World Trade Organisation commitments."
It will allow foreign traders to directly undertake rice trading in the
country and export Vietnamese rice, and they will no longer need to
enter into joint venture with local companies, he said.
A glaring weakness of Vietnamese firms is their small size and limited funds compared to their foreign counterparts, he said.
It throws up the possibility that many Vietnamese exporters will be
forced to turn into local suppliers for foreign partners, he said.
"To improve their competitiveness, Vietnamese exporters need to be able to but rice from farmers at reasonable prices."
Ministries, companies, and localities should cooperate to work out
reasonable rice production costs, which could then be used to establish
prices to be paid to farmers.
Phong also made some
forecasts about the domestic market this year – Vietnam will be able to
ensure food security and rice prices will be rather stable; paddy prices
will not be less than 5,000 VND per kilogramme./.