For the year ended December 2014, Vietnam exported 6.316 million tonnes of rice, grossing US$2.789 billion in revenue, down 5.47% on-year in volume and 3.59% in value.
Despite fulfilling the set target, rice exports were lethargic ranking third among the world’s largest exporters after Thailand (10.5 million tonnes) and India (10 million tonnes).
Market analysts at the VFA attribute the slump to the sharp decline in demand for rice in the African markets, overproduction by Thailand and India along with lack of growth in Asian markets.
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Fulfilling set plan
Analysts at the VFA have reported that the difficulties from 2014 will carry over and continue to negatively affect the market in 2015.
Last year, exports of rice via the Chinese borders skyrocketed, helping clear stockpiles; however, the border trade is fraught with risks and does little to bring in the large foreign currencies.
According to VFA statistics, rice exports on record through the Chinese border was roughly 650,000 tonnes, but, in fact the real volume of rice transported from the Mekong Delta region to the northern region via Haiphong Port was substantially higher.
The best estimates available put the figure at closer to 2 million tonnes.
On the bright side, VFA Secretary General Huynh Minh Hue said in addition to processing and consuming rice, enterprises have improved coordination with farmers and improved the quality and value of rice.
Hue added that there are also advances afoot to develop a national brand name expand markets and raise production efficiency, but businesses faced many difficulties in 2014.
900,000 tonnes of rice to be shipped in first quarter of 2015
The VFA has forecast the rice supply and demand for 2015 to remain unchanged from 2014, but the market will continue to face challenges with sustainability and a lot needs to be done to rev up the industry.
Based on real situation, VFA forecast that more than 7 million tonnes of rice will be exported in 2015, including 900,000 tonnes in the first quarter. This is the lowest level for the quarter for the past several years.
VFA Chairman Nguyen Hung Linh said for the first quarter of the year, businesses have only signed contracts to ship around 500,000 tonnes of rice and they must export an additional 400,000 tonnes to meet the set plan. Currently, the domestic price is competitive as it is lower than or as same as other rice exporters at US$380 per tonne for 5% broken rice.
The VFA is hoping to meet the plan to export 900,000 tonnes of rice in the first quarter while it strategizes for longer term solutions to shore up the industry exports and power up the economy.
