Vietnam paradox: big rice producer must import rice

Thursday, 22/07/2010

,

VietNamNet Bridge – Vietnam is well known throughout the world as a big rice producer and second biggest rice exporter. Now, Vietnam must import rice and rice bran.

Rice export targets lifted as India, Thailand cut back

Vietnam wins successive bids for big rice export deals: joy or worry?

Rice export price lowest in the world

According to HCM City Customs Agency, in the first six months of 2010, Vietnam imported $1.6 million worth of rice, a slight increase over the same period of 2009. The imports mostly came from Thailand, Singapore, Taiwan and China.

Market analysts aver that the actual import volume was much higher, because rice has been carried across the borders with Cambodia and Laos.

Hai, a rice small merchant in HCM City, observed that the southern region does not lack rice, but more and more Thai rice has arrived in the last year.

Rice traders can make the same profit when selling foreign rice and domestic rice. However, it is easy to import and sell foreign rice.

At the Co-op Mart chain, three kinds of Thai rice are available, including Jasmine Sundee rice distributed by The Ky Vang Company and sold at 162,000 dong per pack of five kilos, plus two other kinds of fragrant rice.

Representative of Saigon Co-op reported that foreign rice now accounts for five percent of the total 50 kinds of rice available at the supermarket chain. It is estimated that 10 tons of foreign rice is sold monthly. Foreign rice is priced at 30,000 dong per kilo on average, while the best Vietnamese rice sells at 20,000 dong per kilo. The consumers are high income earners or foreigners living in Vietnam.

Foreign rice can also be easily found at supermarkets and food stores that sell Japanese and South Korean food, with relatively high prices of 230-310,000 dong per pack of five kilos.

Many people could not imagine that Vietnam, which produces 35 million tons of rice every year, must import thousands of tons of rice bran to make animal feed.

Rice bran accounted for one percent of the total revenue of animal feed products in 2009, but this has increased sharply over the past two years.

Customs agencies confirmed that, in the first five months of 2010, Vietnam imported more than 6000 tons of rice bran, with the import revenue of over $10 million, an increase of 170 percent over the same period of 2009. The imports mainly came from India, which provided 80-90 percent.

Why does Vietnam have to import rice bran? Importers claimed that it is cheaper than domestic bran. The import bran market has become hectic with tens of big importers and hundreds of smaller traders across the country.

Pham Duc Binh, General Director of Thanh Binh Company in Dong Nai Province and Deputy Chair of Vietnam Livestock Feed Association, agreed that firms are importing more rice bran because they are cheaper than domestic products.

“Indian suppliers are offering to sell rice bran at $155 per ton CNF. With such a price, the cost after taxes would be 3300 dong per kilo, much cheaper than the domestic product, now selling at 4050 dong per kilo,” he estimated.

According to Phan Hong Lien, an analyst of Agromonitor, a market survey and analysis firm, it is necessary to re-consider the overall development strategy of animal feed production, when Vietnam is having to import rice bran.

Source: Tuoi tre