VietNamNet Bridge – The lesson is that Vietnam usually pushes up export when the world prices are at low levels and reduces the exports when the prices reach the highest peaks.

The double success

With the record rice export amount of 7.1 million tons in 2011, Vietnam has once again, has affirmed its position as a big rice exporter in the world. The country has been staying firmly on its position over the last 23 years in exporting the strategic farm produce.

Nguyen Dinh Bich, a Ministry of Industry and Trade’s rice expert, wrote in his article published on Dat Viet newspaper that over the last three years, Vietnam has continuously made new export records every year.

In 2009, Vietnam exported more than six million tons, an increase of 1.4 million tons over 2008. This was for the first time, Vietnam’s export volume was higher than 20 percent of the world’s “rice export basket.”

In 2010, Vietnam’s rice exported amounted to 21.4 percent of the total rice exports in the world (6.75 million tons). Meanwhile, in 2011, though the export volume only increased by 350,000 tons over 2010, Vietnam’s exports still accounted for 20.7 percent.

The figures have much significance if noting that 20 years ago, from 1989 to 2008, the average figure was just 14.4 percent. This is the record that no other rice export country in the world has broken.

In 2011, Vietnam obtained the double success in rice export: it not only increased the rice export volume, but could sell rice at higher prices. The average export price at 494 dollars per ton, the export turnover was at the highest ever level of 3.5 billion dollars. The export price of 494 dollars per ton was just lower than the record price in 2008, when the world witnessed the rice fever and the price climbed to 569 dollars per ton.

This is really an encouraging result if noting that a report of FAO has found that 2011’s rice price index only increased by 10.9 percent on average in comparison with the same period of 2010.

Since Vietnam’s rice could go for better prices in the world market, farmers could also make satisfactory profits. The rice prices at which farmers sold to export companies rose to the record highs. According to the Vietnam Food Association VFA, the rice price in Mekong Delta in 2011 reached 6100 dong per kilo, up by 1800 dong, or 41.7 percent.

The “quantity peak” and the “value bottom”

However, a chronic disease in rice export has not been treated. Vietnamese rice exporters try to push up exports when the prices go down, and they tend to shrink when the prices go up. The thing happened in 1998-2000 and recently in 2008.

The statistics of VFA showed that when the rice export price in the second quarter was at the bottom level at 465 dollars per ton, the export volume was at the highest peak of 2.053 million tons, accounting for 28.9 percent of the yearly export volume.

Meanwhile, when the export price reached the highest peak of 562 dollars per ton in the fourth quarter, the export volume decreased to 1.234 million tons, or 17.4 percent.

In the first eight months of the year, when the export price was just 476 dollars per ton, the export volume climbed to 5.31 million tons, while the export volume decreased to 1.794 million tons in the last four months when the rice climbed to 547 dollars per ton.

As a result, while the rice output increased sharply in 2011 to 2.32 million tons, the rice export volume only increased by 350,000 tons.

Source: Dat Viet