If the Vietnamese rice were exported at the same price as Thai rice, Vietnam would earn an additional VND1,300 billion (US$81.25 million) on the export of four million tonnes. If farmers in the Mekong Delta could avoid the 11 per cent loss of rice output in production, they would pocket an additional VND3,300 billion (US$206.25 million). The total loss in rice export and production amounts to over VND4,500 billion (nearly US$300 million).
Export: Loss of over VND1,300 billion
According to the Vietnam Food Association (Vietfood), as of July 17, 2007, the average price of Vietnamese rice was US$20-25 per tonne lower Thai rice. 5 per cent broken rice of Vietnam sold at US$305 per tonne, versus US$330 per tonne for Thai rice. 10 per cent broken rice of Vietnam was exported at the price of US$300 per tonne, compared with US$325 from Thailand. 15 per cent broken rice was exported at US$295 per tonne, compared with US$315 from Thailand.
Rice exporters said the Thai rice price has been higher than that of Vietnam by US$20 per tonne for years. Thus, if Vietnam annually exports four million tonnes of rice, Vietnam will lose over US$80 million, or VND1,300 billion.
Vietnam is second to Thailand in rice export, but why should Vietnamese enterprises have to accept lower prices, losing more than VND1,300 billion? Has Thailand occupied the high grade rice market and Vietnam the lower grade one, or do the lower prices simply reflect different business practices?
An official from the Northern Food Corporation said the difference came from quality. He said Thai 5 per cent broken rice looks similar in length, polish and bad seed proportion. The proportion of bad seeds in Thai rice is just 1.5 per cent, while such a ratio in Vietnam’s rice is 3-3.2 per cent. Therefore, Thai rice is highly marketable and expanding to Vietnam’s traditional markets like Iraq.
Low selling prices have already driven Vietnam back to the third or fourth position among the top five rice exporters in the world (Thailand, India, the US, Vietnam and Pakistan) in terms of export value in the ranking of the World Trade Centre, although it ranks second in terms of export quantity.
Production: Nearly VND3,400 billion loss
To avoid the loss of VND1,300 billion in export, Vietnamese farmers should raise the quality of their rice to fill the price gap. Thailand’s immense rice crop consists of only one kind of rice, but Vietnam cultivates dozens of kinds of rice. The mixture in rice growing is blamed for the lower quality. Meanwhile, Vietnam is actually worse at building its trademark and employing post-harvest techniques like drying and preservation, also to blame for low rice quality.
Beyond losing on the export market, according to Deputy Minister of Agriculture and Rural Development Bui Ba Bong, peasants in the Mekong Delta region, the largest rice granary of Vietnam, lose around two million tonnes of rice a year, or 14 per cent of total regional yield. According to a report by Can Tho University, the loss takes away VND3,370 billion from farmers.
Mr Tran Ngoc Chung of An Giang Province Department of Agriculture and Rural Development said the main stages of yield loss are harvesting, drying, warehousing and husking. In agricultural production, farmers have to accept some kinds of cost.
However, Vietnamese farmers can introduce measures to tackle the loss of rice. The loss of VND3,370 billion seriously affects the incomes and livelihood of farmers, especially poor farmers with limited cultivation areas, while input costs (fertilisers and pesticides) are higher and agricultural product prices fluctuate.
T. Trang – K. Phuong
Vietnamese
