Member enterprises of the Vietnam Food Association (VFA) have already clinched export contracts for at least one million tons of rice with delivery scheduled for this year.

Most of the volume will be delivered to customers this year based on the contracts that VFA’s member enterprises signed with importers last year. The volume is 200,000 tons higher than the same period last year.

Huynh The Nang, general director of Vietnam Southern Food Corporation (Vinafood 2), however, said local rice exporters might face many more difficulties this year.

The demand for rice of the Philippines, Indonesia and Malaysia is forecast to jump, but Vietnam will have to compete with Thailand, which wants to reduce its huge rice stockpiles.

China, a major importer of Vietnamese rice in recent years, is said to have inked a memorandum of understanding to purchase two million tons of rice from Thailand this year.

However, Nguyen Dinh Bich, an expert in the rice industry in Vietnam, has cast doubt on the news, saying Thailand reportedly sold two million tons of rice to China in 2013 but the real volume was only 300,000 tons.

Concerns have risen among domestic rice exporters for tougher competition from India and Pakistan as these two nations have cut prices of their low and medium-grade rice to compete with similar products of Vietnam.

Currently, India and Pakistan sell 5% broken rice at US$385-395 per ton and US$380-390 per ton respectively, compared to US$380-390 per ton for Vietnam’s same type. Their 25% broken rice is priced at US$350-360 per ton and US$335-345 per ton compared to US$350-360 per ton of Vietnam.

According to VFA, Vietnam had exported 5.96 million tons of rice from January 1 to December 18 last year, falling 11% against the previous year. Up to 83% of the volume was shipped to Asian and African countries and the rest to America, Europe and Oceania.

Last year, Vietnam’s FOB rice export prices averaged US$439 per ton, inching up 2% per ton against 2013. The price of low-grade rice slightly increased while that of 5% broken rice decreased 4-5% from the year’s beginning to US$393 per ton at the end of last year.

To order to boost rice shipments this year, the Ministry of Industry and Trade suggested rice exporters diversify markets, and seek to make full use of the opportunities from bilateral and multilateral trade agreements, and follow updates on importing markets.

The ministry also urged VFA and relevant agencies to enhance the quality of Vietnamese rice and help local rice exporters cope with challenges.