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Rice production shifts positively according to market signals

15:35 | 04/07/2022

VCN - At the conference " Opening up the flow of Vietnamese rice grains " held on June 22, Mr. Pham Quang Dieu, director of Vietnam Market Analysis and Forecast Joint Stock Company (Agromonitor), pointed out that the Philippines – Vietnam’s largest rice importer – switched from importing medium-quality rice to high-quality rice, which has created a big nudge for Vietnam's rice industry to focus on high-quality products.

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Rice production shifts positively according to market signals

Rice is loaded from barge to containers at Tan Cang Sa Dec. Photo: TL

Developing high-quality rice

In the winter-spring crop of 2018-2019, the production area of IR 50404 rice (medium quality products) accounted for about 21% of the total production area of the whole industry. Even in previous years, this proportion was even higher last year, up to 30-40%. Meanwhile, high-quality rice varieties such as OM 5451 are estimated at only 5%, and Fragrant rice DT8 for about 7% of the total area.

However, in the winter-spring crop 2021-2022, the production area of DT 8 increased to 26%, OM 18 accounted for 13%, and OM 5451 8% in total. The IR 50404 variety declined to less than 10%. This is a significant and successful shift from the Vietnamese rice industry's production side supported by the market's traction, said Dieu.

The total exports of IR 50404 rice in 2016 reached about 1.9 million tons. Still, in 2021 this volume decreased to only about 600,000 tons. Meanwhile, the export volume of OM 5451 rice rose from about 100,000 tons in 2016 to about 1 million tons in 2021. DT 8 did not appear on the export statistics table in 2016 until 2021; the total export volume jumped to about 2.3 million tons.

However, Mr. Dieu also said Vietnam's rice industry encountered a trap of low-quality rice from the concentrated market and the unofficial quota trade to China. He questioned whether this situation would happen again in the future. Accordingly, this challenge requires radical solutions from policymakers as well as localities.

Ms. Bui Kim Thuy - an economic integration expert - also said consumers currently focus on "eating well and dressing well" and would like to be healthy and beautiful. Therefore, in addition to food security and quantity, it is also necessary to focus on good, branded, and high-quality products to meet the strict requirements of users. ST25 rice is an excellent example.

Regarding the export price of rice, according to Ms. Thuy, to get a reasonable price, besides the quality, variety, and production process, the brand is the most challenging thing. Vietnam has significant openness and exports a lot, but few exports use their brands because they are unaware of making brands in foreign markets.

Fair competition with Thai rice

Vietnam has the advantage of the diversity of rice varieties, including wide varieties of short and round grain rice that Thailand and Cambodia do not have. Similarly, Cambodia does not have Thailand's long-grain rice variety, said Mr. Nguyen Chanh Trung, Deputy General Director of Tan Long Group.

In particular, Vietnam has very diverse varieties of fragrant rice. “Fragrant rice is entering new markets. Some new markets in Africa, such as Ghana, are very fond of Vietnamese fragrant rice. Vietnam can compete fairly with Thailand on the price of ST24 rice. Meanwhile, the Chinese market consumes a lot of Vietnam's ST21 rice, the cost of ST21 rice used to be very high, and the price of Japonica rice is also higher than the long-grain one," Mr. Trung said.

Mr. Trung said Filipinos prefer Vietnamese rice to Thai rice. Besides living standards, this is also due to the tastes of Filipinos. Therefore, Thailand cannot compete with Vietnam in this product.

Mr. Dieu also said, in the last 5-7 years, international traders recognized the better competitiveness of Vietnamese rice. Thai traders are concerned that Vietnamese rice may cause Thailand to lose market share. Notably, Vietnam's sticky rice has had sudden growth, accounting for 70%-80% of the total export volume of about 600,000-700,000 tons worldwide.

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However, the current problem is the unstable supply and quality of rice. Currently, ST24 and ST25 rice are not enough to sell. Therefore, it is necessary to have a plan to increase the farming area. Enterprises must have a long-term project, good seeds, preservation, and a systematic post-harvest handling plan. The quality of rice will reduce if rice is stored and congested for a long time and many enterprises must reimport the rice if they can export them on time

By Nguyen Hien/ Hai Yen