Experts believe that Vietnam should focus on producing high-quality rice instead of striving to earn money from selling low-cost rice products. But this would mean that low prices won’t be the ‘weapon’ for Vietnam to compete with Thailand in the world market, especially in Africa and China, which favor low-cost products. The Thai government announced it planned to sell all its stockpiled rice – estimated at 8 million tons, soon after Vietnam began harvesting the 2016-2017 winter-spring crops. The sales in the beginning of 2017 were relatively satisfactory with many big contracts signed. However, in recent days since the Thai government’s announcement, the demand has been timid and no contracts have been signed.
The price of Vietnam’s 5 percent and 15 percent broken rice is being offered at $5-10 per ton higher price than that of Thailand of the same variety. Therefore in order to compete with the Thais, Vietnamese exporters would have to lower their selling prices, which would mean, they would incur losses because the domestic price is on the rise. According to Mr. Huynh The Nang, chairman of the Vietnam Food Association (VFA), Due to competition from Thailand, Vietnam has to cede its market share in some markets which have demand for white rice. For example Vietnam, can only try to increase the export of fragrant rice to Africa, while the white rice market segment has been dominated by Thai rice. Mr. Nang added that the export market would only recover once the rice is sold out. In such conditions, VFA said it was going to propose to the government to kick off a plan on buying rice from farmers for stockpile.
Mr. Vo Truong Giang from Angimex warned that the rice price won’t decrease considerably this year because of the low yield forecasted. Normally the farmers can get 0.7-0.8 tons of paddy from every 1,000 square meters. However, the yield may be 30 percent lower this year due to which there is no need of the collection of crop for storage right now. In the context of slow sales, experts believe that Vietnam would rather gather strength to compete with rivals in the high-end market segment like China, South Korea, Singapore and the EU that have good demand for high-end products.