Vietnam committed to following market rule regarding rice prices

Processing rice for export at Tan Tuc Rice Premium Enterprise, Ho Chi Minh City (Photo: VNA)

Hanoi, (VNA) – Vietnam always follows market rules regarding rice prices, said the Director of the Plant Cultivation under the Ministry of Agriculture and Rural Development (MARD) Nguyen Nhu Cuong at the ministry’s recent regular press briefing. 

He made the statement in response to information that the Thai government announced it had agreed with Vietnam to raise rice prices in the context of high rice production costs. 

The official asserted that Vietnam always abides by stipulations of the free trade agreement that the country has signed. Regarding rice, Vietnam is committed to following market price rules and upholding its responsibility for food security.  

He noted that rice export volume and value increased in the eight months of this year. Vietnam shipped 4.73 million tonnes of rice abroad for 2.3 billion USD, up 18.6% and 8.1%, respectively, from last year. 

However, the export price of rice suddenly dropped in August, with white rice 5% broken fetching from 390 – 393 USD per tonne, down 25 USD from the price in July. This is the fourth consecutive decrease so far. 

The price of Vietnamese rice is lower than that of its Thai counterpart. The average price of Vietnamese rice for the first eight months of 2022 was estimated at 487 USD per tonne, a reduction of 8.8% from the same period last year. 

To help rice exporters make the best use of available advantages, the MARD will coordinate with related ministries and agencies to provide exporters with the latest information on the market, according to Deputy Minister Phung Duc Tien.  

“The MARD will push the restructuring of the rice production sector in the direction of raising value while joining hands with localities and businesses to build the brand of Vietnam rice,” Tien said, adding that the target of exporting 6.5 – 6.7 million tonnes of rice this year is quite reachable. 

The reduced price of Vietnamese rice recently is attributable to the quality of rice in the latest harvest, which is only equal to its counterpart in Thailand and India. However, the price is not likely to drop, considering strong global demand while the supply of summer-autumn rice crops in the Mekong Delta is decreasing. 

In addition, Vietnam’s rice has found a place in new markets such as the US and European countries. For example, a Vietnamese rice product was first put on the shelves of E.Leclerc Viry Châtillon, a hypermarket run by top French retailer E.Leclerc, on September 2 during a so-called Vietnamese mid-autumn week event as part of a programme run by the Vietnam Trade Office in France.

The product branded ‘Com Vietnam’ is produced by Loc Troi Group, a leading provider of agricultural services and products in Vietnam. 

Since the EU-Vietnam FTA came into force on August 1, 2020, rice exports have rapidly seen an upturn. Under the trade deal, the EU gives Vietnam a quota of 80,000 tonnes of rice with a zero-per-cent tax rate per year, including 30,000 tonnes of milled rice, 20,000 tonnes of unmilled rice and 30,000 tonnes of aromatic rice.

The EU will reduce the import duty rate for rice from Vietnam to zero in the coming years. Taking advantage of the above, from September 2020, Vietnam started to sell rice to the EU at a much higher price than before.

Vietnam exported over 2,730 tonnes of rice to the UK in 2021. Despite a decline of 20% in the volume from 2020, the export value still picked up 4% year-on-year to around 2.76 million USD, thanks to a hike in exported prices.

Among Southeast Asian countries that exported rice to the UK in 2021, Vietnam enjoyed the highest average unit price at 1,012 USD per tonne, while that of rice from Thailand, Cambodia and Myanmar stood at 999 USD, 991 USD and 502 USD per tonne, respectively.

At present, Vietnam and Thailand account for 10% of the global raw rice output and 26% of rice exports worldwide./.