Vietnam is having difficulty boosting rice shipments despite forecast of continuous increase in the price, buoyed by the higher demand for rice of some countries. According to a study conducted by the Institute of Policy and Strategy for Agricultural and Rural Development, there are a total of nine million rice farming households nationwide, but around 300,000 of them have rice milling facilities and these are the ones that also account for the bulk of Vietnam’s rice export volume. But in Vietnam, the majority of rice mills are small unlike in Thailand, where there are mere 1,000 rice milling larger plants. Besides, Vietnam has around 100 rice exporters, but only 22 of them focus on its largest rice buyer, China. Industry experts said these two hindrances have led to the global market share of Vietnamese rice shrinking.
Statistics of the Ministry of Agriculture and Rural Development show the country’s rice shipments last year dropped 27% in volume and 23% in value terms in comparison to 2015. Vietnam has seen gradual declines in rice exports to China, European Union, Middle East, and Sub-Saharan Africa whereas Vietnamese rice producers have failed to develop premium rice brands. Moreover adoption of food security policies by the key importers of Vietnamese rice products have further restricted its rice exports. China, for this reason, is buying rice from different countries, said Pham Kim Dung, the study’s lead researcher. Rice prices are expected to climb further in short term as some countries are stocking up on rice, such as Malaysia with 950,000 tons and Bangladesh with 600,000 tons according to the World Bank and the International Monetary Fund.