"We buy what is cheap, we make what we can make at a high price, we use that money to buy cheap things to process, that's normal, due to the efficiency of the rice grains, nothing big or worrying. Growing fragrant rice sells for 600 USD/ton, a type like IR50404 only costs 500 USD/ton, so which one to choose? That's the problem" - Mr. Nguyen Van Nhut - Director of Hoang Minh Nhat Joint Stock Company - said.
Farmers know what to plant effectively
As the world's leading rice exporting power, but every year Vietnam also imports a lot of rice from other countries. In the first 9 months of this year, Vietnam spent nearly 1 billion USD to import rice products, an increase of 57.3% compared to the same period last year. This is a record high number for the rice industry so far.
Vietnam often imports low-quality rice to meet the needs of animal feed production, cakes, vermicelli, flour, etc. Because few people grow this rice segment domestically, most farmers have switched to growing fragrant rice. high quality rice for export.
Talk to PV Tien Phong , Mr. Nguyen Van Nhut - Director of Hoang Minh Nhat Joint Stock Company, Can Tho City - said that the rice export High quality and low quality rice import is the normal trend of market economy. This is determined by economic efficiency, like "water flows to low places".
According to Mr. Nhut, the stream low grade rice Like IR50404 variety which was widely grown 10-15 years ago, at that time it accounted for 70-80% of the total area. rice variety structure of Vietnam. With the characteristics of dry, spongy, and expanding rice grains... IR50404 variety is suitable for making post-rice products such as cakes, vermicelli, flour... Due to its low value, farmers have gradually replaced it with fragrant, sticky, high-quality rice varieties with higher value, so low-grade rice is in short supply and must be imported.
“We buy what is cheap, we make what we can make at a high price, we use that money to buy cheap things to process, that is normal, due to the efficiency of the rice grains, nothing big, nothing to worry about. Growing fragrant rice sells for 600 USD/ton, a type like IR50404 only sells for 500 USD/ton, so which one to choose? That is the problem. If we grow it and sell it at a low price, why would anyone grow it, farmers know what type is effective," said Mr. Nhut.
Information businesses, low-grade rice is commonly produced in India with good yield but low price, similar to Vietnam's IR50404 rice which was widely grown before. However, this type of rice is very difficult to sell, the price is low, so the ministries recommend farmers to switch to growing high-quality rice. When people gradually switch to the high-quality segment, low-quality rice is in short supply, and if grown, it is cheap, so farmers gradually give up.
Low grade rice only 10% left
In the rice variety structure in Vietnam, the low-grade variety group currently accounts for a small proportion. According to Department of Crop Production - Ministry of Agriculture and Rural Development (MARD), in the 2024-2025 Winter-Spring crop, the Mekong Delta region is expected to plant nearly 1.5 million hectares. Of which, the main group with wide adaptability, good domestic consumption and export accounts for 60% of the area, such as: OM18, OM5451, OM4900, OM6976, Jasmine 85, Dai Thom 8, OM7347, Nang Hoa 9...
The group of specialty sticky and aromatic rice varieties is increasing in the general variety structure, accounting for 30%, such as: ST24, ST25, RVT, Nang Hoa 9, IR4625 sticky rice, An Giang sticky rice... (of which sticky rice is 10%).
Low-quality rice varieties account for only 10% of the area, are grown in specific production areas (alum, flooded), used for processing, and have a narrow market, such as: OM380, Cuu Long 555, OM2517, ML202...
Rice businesses assess that the above strategy is suitable for the current situation, when India has returned to the rice export "playground". Therefore, Vietnam needs to minimize the low-grade rice segment, focusing on fragrant, high-quality, valuable rice products, instead of competing with India for cheap rice.
Rice varieties such as Dai Thom 8, OM18, OM5451... are recommended by businesses for farmers to focus on. Because this is a large segment, favored by many large markets such as the Philippines, Malaysia, China, the Middle East... These rice varieties are also Vietnam's rice production has advantages in growing areas, reasonable prices, and is well accepted by the market. The above restructuring will help the Vietnamese rice industry reduce pressure and avoid confrontation with the "heavyweight" competitor India.
The strategy for developing Vietnam's rice export market to 2030 approved by the Prime Minister (Decision 583/QD-TTg dated May 26, 2023) sets the goal of: Increasing added value, increasing the value of exported rice; reducing the volume of exported rice by 2030 to about 4 million tons, with a turnover equivalent to about 2.62 billion USD.
Regarding the structure of varieties, the above strategy determines that in the period of 2023 - 2025, the proportion of low and medium-grade white rice will account for no more than 15%; high-grade white rice 20%; fragrant rice, japonica rice, specialty rice 40%; glutinous rice 20%; high value-added rice products such as nutritious rice, parboiled rice, organic rice, rice flour, processed products from rice, rice bran and some other by-products from rice will account for about 5%. Strive for the proportion of branded exported rice to be over 20%.
In the period 2026 - 2030, the proportion of low and medium-grade white rice accounts for no more than 10%; high-grade white rice 15%; fragrant rice, japonica rice, specialty rice 45%; glutinous rice 20%; rice products with high added value account for about 10%. Strive for the proportion of branded exported rice to be over 40%. At the same time, increase the proportion of rice exported directly to the distribution system of markets to about 60%; improve the efficiency of rice exported through intermediary channels (in case of inconvenient transportation and payment).
According to this strategy, we strive to achieve about 25% of directly exported rice bearing the Vietnam Rice brand by 2030.
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