According to forecasts, global rice supply is decreasing due to restrictions on rice exports in some countries and severe weather conditions such as floods, natural disasters, and droughts, which have reduced rice production. Consequently, Vietnam’s rice exports are projected to flourish, presenting opportunities to access more demanding markets.
Development of raw material regions supports the stable growth of Vietnam’s rice exports.
Production needs to meet stringent standards
Encouraging signs in rice exports in Q1 were partly due to enterprises effectively leveraging opportunities from Free Trade Agreements (FTAs); Vietnamese rice is increasingly penetrating “demanding” markets. These developments continue to affirm the increasing quality of Vietnamese rice.
According to the Ministry of Industry and Trade, by the end of Q1 2024, rice exports reached over 2.18 million tons, equivalent to USD 1.43 billion, with an average price of USD 653.9 per ton. Compared to the same period last year, there was a 17.6% increase in volume, a 45.5% increase in export turnover, and a 23.6% increase in price.
In Q1 2024, rice exports continued to dominate key markets with high consumption demand. Specifically, the Philippines remained Vietnam’s largest rice importing market, accounting for 46.4% of total volume and 45.5% of total export turnover; Indonesia ranked second with significant increases of 199.7% in volume and 308.8% in turnover, while Malaysia increased by 28.8% in volume and 60.6% in turnover.
The export prices to these three markets all saw significant increases, with prices to Indonesia rising by 36.4% and to Malaysia by 24.7%. In addition to increasing volume, turnover, and prices, Vietnam has expanded exports of high-value rice types that meet market demand.
According to the Ministry of Industry and Trade, traders have effectively utilized market opportunities from FTAs, and market structures are gradually shifting positively towards diversification, in addition to traditional markets like China, the Philippines, and Africa, expanding into “demanding” markets such as Europe… with high value.
Furthermore, businesses have capitalized on global food trade challenges to become alternative suppliers in many potential markets such as the US, Canada, and Chile.
Assessing the rice export landscape, Mr. Le Thanh Tung, Deputy Director of the Department of Crop Production (Ministry of Agriculture and Rural Development), noted that over 80% of Vietnam’s rice seed and exports are of high quality, specialty rice that meets the requirements of exporting enterprises.
Mr. Tung emphasized that Vietnam’s rice production not only focuses on export issues but also ensures national food security. Currently, rice production in the Mekong Delta is concentrated on sustainable farming practices adapted to climate change, producing to meet standards that satisfy domestic and export market demands.
The deeper the integration, the more important it is to focus on meeting the requirements and standards of the import market. “In demanding markets, their standards are very strict, so production must be organized to meet these standards,” Mr. Tung said.
Promoting rice brand development
Some rice export companies pointed out that Europe is a demanding market where in recent times, they have made great efforts to enter this market.
Sharing from the leader of a rice company, currently, the export price of rice to 13 European countries is at USD 980 per ton. This price is quite good, but entering this market is not simple; the company has undergone many ups and downs, where if not focusing on basic factors such as brand, technology, human resources, and linkage in the rice value chain… companies may find it challenging to establish a firm foothold in such a stringent market like Europe.
And this company also specifically pointed out that to create a value chain, strong involvement from local authorities alongside businesses to open up raw material regions and receive local support is crucial. If the entire rice value chain is linked and cohesive, this will certainly form a stable and high-quality raw material region.
According to Mr. Bui Ba Bong, Chairman of the Vietnam Food Association, the achievements in rice exports recently have affirmed the brand and reputation of Vietnamese rice as localities have planned concentrated production areas to stabilize quality, aiming towards export markets.
To enhance the image and position of Vietnamese rice, experts believe that ministries and departments need to actively support enterprises, associations to promote the image of Vietnamese rice for market development both domestically and internationally. Additionally, businesses need to focus on developing raw material regions to meet quality standards and market requirements.
“Raw material regions depend decisively on the hands of local authorities because if localities take action, cooperatives can link with farmers. When farmers are linked, there will be stable and high-quality raw material regions according to enterprise standards. If farmers are not linked, there will be no stable, long-term raw material regions,” Mr. Bong emphasized.
