US: Vietnam Rice industry needs to learn painful lessons for it to prosper

In recent years, Vietnam can be proud of its great achievements in exporting rice. But, it would be a mistake if we failed to realise our weaknesses in production and exporting this strategic item. Vietnam is the world’s second biggest rice exporter. Moreover, some officials from the Ministry of Agriculture recently forecast that if a target of intensive farming 1.3 hectares of high-quality rice is achieved, Vietnam will beat Thailand to the top spot in global rice production.

US Department of Agriculture statistics reveal that in 2001, 2004 and 2005 Vietnam was the world’s second largest rice exporter. However, during 2002 and 2003 India outpaced Vietnam to hold this position. From 2001-2005, on the average, India held the second position with 4,136 million tonnes per year, with Vietnam third with 4,024 million tonnes.

However, despite Vietnam’s dominance, the financial returns have been poor. During the past five years, Vietnam exported 20.1 million tonnes of rice and earned $4.4 billion. But, Vietnamese rice’s export price was the lowest among the biggest global players, Thailand, India, the US and Pakistan. Specifically, at $220.1 per tonne, Vietnamese average prices equalled just 79.65 per cent of that in the world. While the average export price of the four remaining countries was 91.62 per cent at the lowest and 119.26 per cent at the highest. Meanwhile, Vietnam exported 21.5 per cent more rice than the US, but generated 11.13 per cent less revenue.