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Vietnam may export 5mil tonnes of rice this year
03 | 07 | 2007
VietNamNet Bridge – Truong Thanh Phong, Chairman of the Vietnam Food Association (Vietfood) is optimistic about rice output and exports of Vietnam this year, saying that the export volume may reach 5mil tonnes.

According to Mr Phong, the yield of the winter-spring crop has reportedly reached 9.2-9.3mil tonnes, exceeding the targeted plan. Moreover, the quality of rice has improved, and the price is increasing.

How do you assess the domestic and export markets at this moment, after considering rice exports so far this year?

Now I can say that the rice yield of the winter-spring crop is very satisfactory, far exceeding the targeted plan of 8.8mil tonnes. The quality is very good.

As Vietfood has forecast, enterprises will be able to export 2.5mil tonnes of rice in the first half of the year. We have signed contracts to export 3.5mil tonnes of rice, 3mil tonnes of which will be delivered in the first six months, while the other 500,000 tonnes will be delivered between now and September.

Regarding consumption, there are more buyers than sellers. The export price of Vietnam-sourced rice is $40/tonne higher than it was at this time last year. Vietnam-sourced high-grade rice, the 5% broken rice, is being exported at the same price level as in Thailand, at over $600/tonne.

What advice will you give to farmers and rice exporters?

Big rice exporters in the world all are not capable of raising their outputs to raise exports, while the demand is estimated to increase considerably. Especially, Indonesia will import a big volume of rice this year. Therefore, the sellers, not the buyers, will decide the prices.

Vietfood intends to sell some more types of high-grade rice, the 5% broken rice, while it would not encourage enterprises to sell low-grade rice any more. High-grade rice will go for a much better price.

Moreover, since the beginning of the year, enterprises have signed many contracts on exporting medium-grade and low-grade rice; therefore, we do not need to sign similar contracts any more, and the prices proved to be relatively good.

Vietfood has also advised enterprises not to hastily sell rice at low prices, but only sell when the prices are acceptable.

According to a newly conducted survey by Vietfood, farmers have had bumper crops this year and gotten high profit. This is the sixth consecutive year Vietnamese farmers have had a good crop and sold at high prices. The survey has shown that the production cost is at VND1,200/kg, while farmers can sell paddies at VND2,600/kg, which means they can make two-fold profit.

You have said that rice exports are very encouraging for this year. However, rice harvesting and processing seem to remain a big problem.

You are right. Vietnamese farmers have got used to a small scale of production so they don’t know what to do with a big scale of agricultural production.

For example, we are lacking manpower for harvesting crops as we have not totally mechanised agricultural production. Paddies need to be dried, while not every farmer household has dryer. I think in the future, farmers should gather together in big organisations, and the most ideal model is the cooperative.

You have emphasized the important role of association and the need to organise rice production on a large scale. Could you please give more details about these issues?

In fact, rice exports have been liberalised for many years, and we are not too worried about the joining of the WTO. However, we have to get ready for the tax cuts on farm produce under the set roadmap.

By 2010, Vietnam will absolutely cut taxes on imported farm produce, and Vietnamese enterprises have to reinforce their production bases, upgrade processing and preservation workshops to get ready for the market opening.

Vietnamese enterprises will also need to seek ways to sell rice directly to foreign buyers, instead of selling through intermediaries as nowadays. In order to reach that end, we need a powerful association.

(Source: TBKTVN)
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