Many opportunities for expanding rice exports

On February 29, 2024, the Trade Promotion Conference with Vietnamese trade agencies abroad in February 2024 was organized by the Trade Promotion Department and the Import-Export Department (Ministry of Industry and Trade) with the theme: "Assessing the export situation and orienting trade promotion activities to develop the rice market in 2024".

Build solutions that fit each scenario

At the conference, a representative of the Vietnam Food Association said that despite many challenges such as the El Nino weather phenomenon, geopolitical conflicts and India's sudden ban on rice exports, 2023 is still a year of great success for our country's rice industry with an export output of over 8.1 million tons, worth 4.6 billion USD, and an average export price of 575 USD/ton. Compared to the same period in 2022, the volume increased by 14.4% and the value increased by 35.3%, the average price increased by 88.8 USD/ton. In particular, this is the highest export result in the history of Vietnam's rice industry since it joined the export in 1989. Vietnam continues to be one of the top 3 rice exporting countries in the world, accounting for about 15% of the total global rice export volume, along with India and Thailand. Last year, Vietnamese rice continued to be welcomed by the three main import and consumption markets, namely the Philippines, Indonesia and China.

In January 2024, rice export activities showed signs of improvement. According to preliminary estimates from the Ministry of Industry and Trade, Vietnamese rice was exported to 27 markets with a volume of over 512,000 tons, worth 362 million USD in January 2024, an increase of 42.8% in volume and 94.5% in value compared to the same period in 2022.

Identifying the global rice trade situation in 2024, Mr. Vu Ba Phu, Director of the Trade Promotion Agency, said that this market continues to be affected by many factors (such as rice export bans in some countries; Russia's announcement of withdrawal from the Black Sea Grain Agreement; unfavorable weather negatively affecting food production in many countries...), affecting the rice production and export activities of countries. Therefore, changes in policies, fluctuations in supply and demand and price trends of rice consuming countries in the world will all directly affect the Vietnamese rice industry.

Vietnam continues to be one of the top 3 rice exporting countries in the world. Photo ST

Mr. Tran Quoc Toan, Deputy Director of the Import-Export Department, said that the Ministry of Industry and Trade will continue to review and promptly complete the Decree amending and supplementing Decree No. 107/2018/ND-CP of the Government on rice export business to complete the legal corridor for the rice export mechanism, creating a transparent, fair and favorable business environment for rice exporters. Coordinate with the Ministry of Foreign Affairs, the Ministry of Agriculture and Rural Development to proactively negotiate to diversify export markets, take advantage of opportunities to capture new and potential markets to increase the competitiveness of the Vietnamese rice industry.

At the same time, increase flexibility in organizing and implementing trade promotion activities, combining traditional and online forms to enhance cooperation in rice trade with traditional markets such as Indonesia, Africa, China... exploit niche markets with fragrant rice and high-quality rice that we have penetrated in recent years such as the EU, Korea, the United States, North America... In particular, focus on organizing and implementing the Strategy for developing Vietnam's rice export market to 2030 with the highest results.

In addition, improving capacity and developing the supply chain, through guidance and support for rice export traders to improve production capacity, business, market information, negotiation, signing, implementation of export contracts, handling international trade disputes; supporting localities and traders to synchronously improve the rice supply chain towards sustainability, applying technology, to ensure output, improve the quality and value of rice products...

Building rice brands in major markets

The Philippines is currently the largest consumer market for Vietnamese rice, with 85% of output imported from Vietnam. Mr. Phung Van Thanh - Vietnam Trade Counselor in the Philippines predicted that Vietnamese rice will still hold the No. 1 position in the Philippines and there is still room and opportunity for Vietnamese rice exporting enterprises to continue to exploit and expand the market, increasing export turnover. However, in the context that Thailand is also looking for ways to increase output, market share of rice exports to the Philippines and compete with Vietnamese rice, Mr. Thanh recommended that Vietnamese rice exporting enterprises need to continue to coordinate well with the Ministry of Industry and Trade, the Embassy and Trade Office of Vietnam in the Philippines to implement programs to promote, propagate and advertise Vietnamese rice products; Diversify rice export products, not only focusing on high-quality rice products to serve high-income people, but also exploiting the potential of medium-quality rice to serve a large number of people with low and middle incomes. As well as proactively seeking partners, expanding customers, strengthening relationships and maintaining reputation in business with partners and customers, building traditional and sustainable customer relationships.

Mr. Pham The Cuong, Vietnam's Trade Counselor in Indonesia - Vietnam's second largest importer, said: In recent days, rice prices in this market have increased sharply due to a serious shortage of supply. As of February 2024, Indonesia has experienced 8 consecutive months of rice deficit due to domestic production falling short of demand. Rice shortages have appeared in supermarkets. The Indonesian Trade Minister had to ask people to switch to buying government-regulated rice to avoid rice prices rising too high in the free market. The retail price of high-quality rice in the market is up to 1.16 USD/kg, exceeding the government's ceiling price of 0.9 USD/kg.

With the current severe rice shortage, the main harvest has not yet begun and the Muslim holy month of Ramadan will begin in mid-March 2024, the demand for food will continue to increase sharply.

Mr. Cuong predicted that the Indonesian Government will have to continue to open bids to buy more rice soon, in addition to the bid to buy 500,000 tons of rice on January 17, 2024 (in which Vietnamese rice exporting enterprises won bids to supply more than 300,000 tons). Therefore, Vietnamese rice exporting enterprises need to closely monitor market information and take advantage of opportunities to export rice in the first months of the year to this Indonesian market.

Regarding challenges in 2024, according to the Trade Office's assessment, although Vietnamese rice has established a foothold in the Indonesian market, the policy of ensuring food security from domestic rice sources and maintaining a strict import management policy for rice products will cause Indonesia's rice import demand to tend to decrease in the coming time. In addition, Vietnamese rice faces increasingly fierce competition with Thai rice.

Therefore, Mr. Pham The Cuong recommends that rice exporting enterprises need to pay more attention to brand building and have a systematic strategy to promote the brand and quality of Vietnamese rice.

In particular, exporting enterprises need to always ensure rice quality, meet quarantine standards; ensure on-time delivery as well as signed contract agreements because the number of traders with import licenses in Indonesia is very limited. The opportunity to find traders qualified to import from Indonesia is not much.

Source link