Thailand sells off rice stock, causing difficulties for Vietnamese rice

Thailand's plan to sell more than 8 million tons of rice will affect the world rice market, including Vietnam.

Vietnam’s target of exporting more than 5 million tons of rice, worth 2.3 billion USD in 2017, is becoming difficult as its major competitor in rice export, Thailand, plans to sell off its 8 million tons of rice reserves. This will be one of the main reasons for the difficulties in rice consumption in our country, especially in the upcoming Winter-Spring crop - Vietnam’s main crop of the year.

In the early days of 2017, many businesses had customers and signed some important rice export contracts. However, at present, the rice business situation shows signs of slowing down, some businesses have not signed any more contracts.

Vietnam's rice export forecast is affected when Thailand sells off its rice stock. (Illustration photo: KT)

The reason is that Vietnam's domestic rice prices and export prices are slightly increasing compared to the time before Tet. Along with that, the information that Thailand plans to resolve all of the more than 8 million tons of rice inventory in the first 6 months of this year has affected the world rice market situation, including Vietnam.

Many rice exporting enterprises believe that Thailand's release of rice from its warehouses in recent years will cause our country's rice exports to decline sharply, typically in 2016.

Thailand’s decision to sell all of its rice stocks in the first half of this year will continue to negatively impact export rice prices, which are forecast to continue to fall sharply. This means that the production and consumption of the upcoming winter-spring rice crop will face more difficulties. Only when Thailand’s rice stocks are completely cleared will the export market be able to recover.

Mr. Ho Xuan Hung, Chairman of the Vietnam Association of Agriculture and Rural Development, said that with short-term solutions, it is necessary to create the most proactive for businesses.

“More importantly, businesses need to stick with clean products to meet market demands, increase the value of rice, and restructure rice production, because this is a product with a very large position and a long-standing tradition in our country. Another thing is not to be passive with the market because Thailand's trends are always fluctuating and in a high position,” said Mr. Hung.

In addition to the factor of selling off Thailand's rice inventory, Vietnamese rice is being affected by many other factors, such as the world's rice inventory is increasing, importing countries are promoting self-sufficiency policies for food security. Along with that is the trend of liberalization in rice trade and increasingly high technical barriers in importing countries.

To stabilize the domestic rice market as well as ensure exports, the Government, ministries and sectors have proposed many solutions, in which creating conditions for businesses to proactively seek export contracts is an urgent requirement and one of the current measures to untie businesses. Because of the 5 million tons of rice exported by Vietnam last year, up to 70% came from commercial contracts.

In the context of rice consumption facing many difficulties, experts believe that Vietnamese enterprises can compete in the high-quality rice segment in markets such as China, Korea, Singapore, EU, etc. because these markets have a huge demand for rice consumption.

However, to increase competitiveness and ensure sustainable rice exports, in the long term, businesses must still ensure food safety and hygiene and improve the quality of rice products./.

According to VOV