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To export 3.8 million tonnes of rice in 2005 and maintain Vietnam’s position as one of the largest rice exporters in the world, the State should devise synchronised measures, including boosting rice exports, developing consumer and distribution networks, upgrading storage areas, roads, wharfs, increasing the competitiveness of Vietnamese rice and promoting the advertising of renowned rice trademarks.
Positive sign in the first quarter of this year
Truong Thanh Phong, president of the Vietnam Food Association and general director of the Southern Food Corporation (Vinafood 2) announced that 2005 is the 17th year that Vietnamese rice has been sold on the global market. By early this month nearly 3 million tonnes of rice contracts had been signed and more than 1.2 million tonnes of rice delivered. More contracts have been signed this year compared to last year. In addition, the volume and quality of rice is also higher, with export rice prices standing at around US$245 per tonne - US$49 per tonne more than the same period last year.
This year’s winter-spring crop has been very successful with the total area under rice cultivation increasing by 10,000ha, to reach 1,479,000ha. Average yield also increased by more than 800kg per hectare, reaching 8.8 tonnes per hectare.
Vinafood 2 has signed contracts to export 1.5 million tonnes of rice, which amounts to 50 percent of the country’s total export volume.
In the first quarter of this year, Vinafood 2 shipped 591,000 tonnes of rice, accounting for nearly 58 percent of the country’s total export volume. It is expected that by the end of this month, 900,000 additional tonnes of rice will be shipped. This success is attributed to the activities of three member companies with Vinh Long Foodstuff Company exporting 82,039 tonnes, Tien Giang Food Company exporting 71,186 tonnes and Kien Giang Import-Export Company shipping 47,883 tonnes.
Difficulties remain
However, enterprises are still facing a number of difficulties. The first difficulty is that banks have limited the amount of credit available to rice companies. With limit capital, enterprises have to speed up turnover so they cannot wait for higher rice prices. For example, due to limited capital, many enterprises have to sell five-percent broken rice at US$254-255 per tonne, US$40 per tonne lower than the same kind from Thailand. In addition, there is no farmer’s association to help food enterprises negotiate and co-operate with each other for mutual benefit.
The Ministry of Agriculture and Rural Development and Vinafood2 affirmed that there will be a shortage of export rice due to droughts and the speculation of more than 500,000 tonnes of rice. Accordingly, the signing and implementation contracts according to the Prime Minister’s directives will be strengthened.
In the first quarter of this year, member companies of Vinafood 2 signed a contract to buy 54,288 tones of rice, including 25,025 tonnes of high quality rice and 16,300 tonnes of Jasmine rice.
Despite prolonged droughts and the soaring cost of fertiliser, prices remained at VND1,100 for one kg of paddy rice, or only at VND900 per kg in Dong Thap, An Giang, Kien Giang, Soc Trang and Can Tho.
Unlike previous years, Vinafood 2 has offered to buy rice
at prices profitable for farmers, generally between VND2,300-2,350 per kg. The corporation’s policy is to buy rice from farmers at higher prices while rice prices in the world market surge.
Synchronized measures needed
Since April, 2005, three agricultural product centers, including Hau Thach Dong in Long An, Phu Cuong in Tien Giang and Thanh Binh in Dong Thap, were officially put into operation. This is considered a model that benefits both farmers and enterprises.
Although the corporation must take from three to five years to become efficient, it will continue to build more such centers, as Mekong Delta provinces need around 100 agricultural product centres to satisfy increasing demand.
To export 3.8 million tonnes of rice in 2005 and maintain Vietnam’s position as one of the largest rice exporters in the world, the State should devise synchronised measures, including boosting rice exports, developing consumer and distribution networks, upgrading storage areas, roads, wharfs, increasing the competitiveness of Vietnamese rice and promoting the advertising of renowned rice trademarks.
VOV - (21/04/2005)
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