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April 2024

Vietnam rice sector requires more support

Crop restructuring: A farmer harvests rice outside Hanoi. Among the challenges facing the industry are problems in post-harvest preservation, which can lead losses, sometimes as high as 10% to 30%. — Reuters

HANOI: Despite a bright outlook for rice exports in the second half of 2023, the sector still needs more support to shift from quantity to quality and seize global market opportunities.

About 6.6 million tonnes of milled rice from the Mekong Delta, the biggest rice production region of Vietnam, are planned to be exported in 2023, including three million tonnes of high-quality rice, 2.1 million tonnes of fragrant and specialty rice, 0.9 million tonnes of medium quality rice and 0.6 million tonnes of glutinous rice.

In the first six months of 2023, about 4.27 million tonnes of rice worth US$2.3bil (RM10.5bil) was shipped abroad, rising 22.2% in volume and 34.7% in value year-on-year.

Export prices averaged US$539 (RM2,456) per tonne, up 10.2%, according to the Quality, Processing and Market Development Department under the Agriculture and Rural Development Ministry (MARD).

Favourable conditions are now in place for rice exports, especially during the second half of 2023, as major markets like China, the Philippines and Malaysia are still purchasing large volumes of grain.

However, there is not much room left to boost the export volume.

Vietnam is also stepping up crop restructuring to convert unproductive rice farming land into areas for other crops.

Given this, promoting the rice value chain and processing to raise the produce’s value is compulsory to raise export revenue.

A representative of the Loc Troi Group said that to further increase rice value, aside from varieties and cultivation techniques, it is necessary to process for export markets. Importers have a high demand for deeply processed rice, but Vietnamese businesses don’t invest in this step.

Meanwhile, the weakness in origin tracing has also led to low prices.

In terms of brand building, Loc Troi rice is priced at up to US$4,000 (RM18,230) per tonne in the European Union, while the normal grain is sold at about US$800 to US$900 (RM3,646 to RM4,102) per tonne.

The price difference is attributed to the shortage of capital to develop production and storage.

The sector also lacks information about markets. With sufficient and updated information, Vietnam can seize opportunities, the Loc Troi representative added.

Tan Long Group chairman Truong Sy Ba pointed out that problems in post-harvest preservation mean losses are still high, about 10% to 30%.

In addition, the Mekong Delta is also facing logistics-related weaknesses. Rice must be dried within five to seven hours at the latest after being harvested to ensure good quality.

Due to poor and long transport routes, the product is sometimes dried after even 24 hours, making it hard to ensure quality.

Logistics is critical to reducing post-harvest losses, Ba said.

The MARD is stepping up the building of a plan to sustainably develop one million hectares of land specialised in high-quality rice farming in connection with green growth in the Mekong Delta.

With this plan, Vietnam will be the first country to connect rice production with green growth, according to Le Thanh Tung, deputy director of the MARD’s Crop production department.

Ba held that the plan will help the sector improve rice productivity and quality and have competitive production costs.

For her part, Bui Tho Thanh Tam, vice-chairwoman of the Vietnam Food Association, underlined the importance of quality, and that Vietnam should not wait for other countries to issue requirements but needs to proactively develop quality and brands.

She added that banks have provided considerable assistance for rice businesses, but it is still very difficult for the companies to access bank loans.

The association called for increasing short-term loans for businesses during harvest periods, and helping them access loans with low-interest rates so that they can purchase rice in a timely manner to serve production. — Viet Nam News/ANN QR Code

Published Date: July 25, 2023

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