Bottlenecks hamper Vietnam’s rice exports

Affirming the value of Vietnamese rice

According to experts, five-seven years ago, Vietnam’s rice exports depended on the Philippines and Indonesia because they had a great demand for low- and medium-grade rice. Since the Philippines adopted a quota mechanism for rice imports, Vietnamese rice exporters have adjusted to the situation by switching to higher quality rice.

Pham Quang Dieu, rice market analyst at Agromonitor, said IR50404 rice accounted for 30-40 percent of Vietnam’s rice export structure, but has now dropped below 10 percent. In particular, Vietnam’s new high-grade fragrant rice varieties have raised concerns among Thai traders because of their quality. In addition, Vietnamese sticky rice currently accounts for 70-80 percent of the global market.

Nguyen Chanh Trung, deputy general director of the Tan Long Group, said Vietnam has more diversified rice varieties compared to Thailand, enhancing its competitive value.

Do Ha Nam, deputy chairperson of the Vietnam Food Association (VFA), said Vietnam is doing very well in rice production and exports with competitive rice varieties that Thailand does not have, such as DT8 and ST.

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Bottlenecks need to be eased

According to the General Department of Vietnam Customs, in the first five months of the year, Vietnam’s rice exports reached nearly 2.77 million tonnes, yielding US$1.35 billion, an increase of 6.6 percent in volume and a decline of four percent in value. Experts attribute the decline in value to bottlenecks in terms of logistics costs, quality and branding.

Balachandra Prashanth, regional manager of Buhler Asia Vietnam, said that besides inconsistent quality because of different crops, Vietnam has yet to use post-harvest technologies. To resolve the problem, it is necessary to apply technologies in storage and treatment in order to achieve the best quality.

Bui Kim Thuy, country representative for Vietnam at the US-ASEAN Business Council (USABC), said Vietnamese businesses need to focus on branding. Vietnam is a developing economy and has an advantage of being linked to most major global economies through free trade agreements. However, few Vietnamese exporters use their own brands. They also have to pay attention to trade remedies, Thuy said.

To increase logistics efficiency in rice exports, it is necessary to improve transport infrastructure, with a focus on resolving bottlenecks in waterways and container ports in the Mekong Delta region. It is also necessary to develop logistics supply chains and create favorable conditions for investors to develop regional logistics centers in the Mekong Delta.

Source: Vietnam Economic Times