FORECAST A BETTER RICE MARKET
Jun, 26th 2017
According to the Vietnam Food Association (VFA), in the first five months of 2017, rice exports reached 2.282 million tons, up 9.71% over the same period in 2015; Average FOB price increased 6.06 USD / ton.
Until now, the registered contract achieved over 3.5 million tons. Expected in the second half of the year will export 2.97 million tons more.
Mr. Huynh The Nang, Chairman of VFA predicted that the rice export market from now to September 2017 will be an opportunity for farmers to produce rice. Some localities in the Mekong Delta harvest SA crop early, farmers sell rice at high prices and traders have good consumption.
It is estimated that SA 2017 crop will have about 3 million tons of rice cargo. From June 2017 onwards with the concentrated export contracts and commercial contracts can export an additional 880,000 tons. Upcoming, Vietnam will participate in the 250,000 tons-rice tender of Philippines. While the rice stock of Thailand is low, so it can be a factor causing the price increase.
Mr. Nang acknowledged that SA crop in the Mekong Delta is "unique" in the world when other countries do not have paddy in this crop but Vietnam has the paddy. The matter is that it should have technical solutions to improve the quality of rice products. For units under the Ministry of Agriculture and Rural Development have information to help farmers and rice enterprises for better rice consumption. However, the orientation of seed structure to organize production and statistical analysis of seedlings is slow to meet the demand for production and consumption. Normally, IR50404 rice variety in the crop is about 20%, but in SA crop can increase by 30%. Recently, when carrying out the export contracts, it is realized IR50404 has reduced sharply in SA crop, Jasmine Rice 85, Nang Hoa 9, VD20 ...
The Department of Agriculture and Rural Development of provinces made statistics with clear varieties, indicating the name of each rice varieties accounted for 10%, 20% ... will be very meaning, helping for production orientation, consumption; companies can calculate business plans. AW crop is recommended the production of IR50404 about 30%.
The paddy price has increased to a high level since Apr 2016. Currently, rice prices are still rising and prices may rise until September 2017. Rice farmers are excited. But why does the rice price increase? According to opinions of some enterprises, the export enterprises export almost over under the contract until Aug. SA crop has peak harvest in July. From July onward, some rice fields in Thailand start to harvest. By September, the rice has peak harvest in the countries, rice price hard to keep high.
At the rice conference in Thailand last May 2017, the world rice industry is turning 180 degrees, the sellers are inactive position but not the buyers. The persons who have the rice stock keep the active position. In 2016, demand of rice in the export market showed that glutinous rice increased by 20%, fragrant rice increased sharply about 29% and accounted for over 50% of high-quality rice at the high price. But there needs the support from Ministries and Departments to help farmers and enterprises improve and ensure the quality of rice.
VFA recommended Ministries and Departments to support the trade promotion in the US market. Recently, the Rice has exported to the US required to test 5/8 substances without residue. The market needs cargos but our cargos do not satisfy. Now we have to make the soil test, check in the production process, check the input materials, how to process. After processed, the final product must be brought to the inspection organizations to check the quality standards before exporting to the US.
According to Mr. Nang, VFA recommends Ministry of Agriculture & Rural Development to orient rice production for high quality at high prices. Due to high demand for high-quality rice and high prices market, VFA is deploying in 3 provinces: Tien Giang, Hau Giang, Dong Thap and Can Tho to build the first production model for 4 cooperatives and one cooperative group to link with 18 companies under the Southern Food Corporation (Vinafood 2). Vinafood 2, Can Tho University and the Department of Agriculture & Rural Development in the 4 provinces of Mekong Delta registered to produce rice follow SQF international standard, to build rice production area with VietGAP standard and orientate to produce with GlobalGAP standards. Enterprises will purchase paddy under the agreement with farmers. This is a solution to help enterprises and rice farmers to approach high-quality rice market.
Source: The VN Agriculture