VietNamNet Bridge – Rice importers have threatened to stop buying if Vietnam doesn’t reduce the selling price. But if Vietnam does this, its rice production would suffer, while it would fall from the position of the leading rice exporter.

The Vietnam Food Association (VFA) collects the winter-spring crop rice at VND4,500 per kilo only, which is VND700 per kilo lower than in 2011.

The association said its member export companies have to pay low for rice materials because Vietnam’s export prices have decreased sharply.

Experts have affirmed that Vietnam’s rice is the most competitive in the world. Thai rice is at least $170 per ton more expensive than Vietnamese. India’s exports remain moderate. The country with high population and high demand for food is believed to be not be capable enough to compete with Vietnam in the long term.

Meanwhile, Myanmar’s rice, though being cheap, has lower quality than Vietnam’s. Meanwhile, it can export no more than 900,000 tons a year. Professor Vo Tong Xuan, a well-known Vietnamese rice expert, affirmed that Myanmar’s rice with low quality and low output cannot be comparable to Vietnam’s.

However, despite the great advantages, Vietnam’s rice prices have been falling down dramatically in the world market. In the first quarter of 2013, Vietnam exported 1.45 million tons of rice, up by 350,000 tons over the first quarter of 2012, but the export turnover was 6 percent lower.

VFA asked not to cut down export price

VFA, which says Vietnam now has to compete fiercely with Thailand, Myanmar and India, has been attempting to ease the rice export prices.

The information has made relevant parties in the rice production and distribution chain, especially farmers, worried stiff.

Experts have affirmed that there no reason for Vietnam to ease the export prices any more. Thailand, which exports 10 million tons of rice every year, has been determined to keep the 5 percent broken rice price at approximately $600 per ton in order to protect farmers’ benefits.

Meanwhile, India only exports many-year inventories when it is sure that it can ensure the domestic food security. Therefore, Indian rice’s quality is certainly lower than Vietnamese.

In such conditions, experts say, Vietnam should follow Thailand when defining the rice export policy to protect Vietnamese farmers’ benefits, instead of following India, which exports rice at low prices.

They also said that Vietnam and Thailand control 50 percent of the world market with 18 million tons of rice provided every year.

 Rice import countries, which cannot let their people stay hungry with the empty rice storehouses, would have to buy Vietnamese rice, which is cheaper than Thai rice (at $550 per ton), because they fear the rice price may go up further.

It would be good if India also raises its export price like Vietnam. But it would not matter, if it does not. When India sells out its cheap rice, it would be the time for Vietnam’s rice.

In fact, the experts said, importers just try to force the prices down by threatening Vietnamese exporters. If Vietnam eases the export prices now, the prices would go down further and further.

Vietnamese farmers have suffered heavily from the rice price decreases. Rice exporters have been selling rice at surprisingly low prices after VFA removed the floor prices for 5 percent broken rice products. At present, the floor price is still applied to 35 percent broken rice, but this kind of product must not be the reference for defining the export price.

NLD