VND4,500bil of loss in rice production and export every year

If Vietnam-made rice was sold at the same price as Thailand-sourced rice, Vietnamese enterprises would make an additional profit of VND1,300bil ($81.25mil) a year. If Vietnamese farmers did not lose 11% of rice volume in production, they would pocket VND3,300bil ($206.25mil) more every year, experts say.

According to the Vietnam Food Association (Vinafood), Vietnam’s rice export prices are $20-25/tonne lower than Thailand’s prices for the same kinds. For example, Vietnamese 5% broken rice is selling at $305/tonne, while Thailand’s product, $330/tonne. The prices for 10% broken rice are $300/tonne and $325/tonne, and the prices for 15% broken rice are $295 and $315, respectively.

As such, if considering that Vietnam exports 4mil tonnes of rice every year and the price is $20/tonne lower than Thailand’s, Vietnam suffers a loss of $80mil a year, or VND1,300bil.

Explaining the price gap, an official from the Northern Food Corporation said that the problem with Vietnam’s rice was the quality. For example, the proportion of bad seeds in Thailand’s rice is just 1.5%, while the ratio in Vietnam’s rice is 3-3.2%. That explains why Thailand has been successfully expanding its export markets, and even gone after Vietnam’s traditional client, Iraq.

Because of the lower export prices compared to the prices of the five biggest rice exporters in the world (Thailand, India, Vietnam, the US and Pakistan), Vietnam is just third or fourth in the ranking of the World Trade Centre, though it ranks second in terms of export quantity.

Deputy Minister of Agriculture and Rural Development Bui Ba Bong said that some 2mil tonnes of paddy, or 14% of total productivity, is lost every year in the Cuu Long River Delta, the granary of the rice export country. According to Can Tho University, with the lost volume of 2mil tonnes, farmer lose VND3,370bil ($206mil) every year.

Tran Ngoc Chung, an official from the An Giang Department for Agriculture and Rural Development, said that paddy was lost during post-harvest works, including drying, storing and husking.

Mr Chung said that solutions should be found to improve the situation, and the high proportion of lost rice must be reduced. The big, lost sum of VND3,370bil decreases the incomes of farmers, especially as rice production costs are very high due to the high price of fertiliser and the fluctuation of the selling prices of farm produce on the world’s market.

Source: VNE