VietNamNet Bridge - China's plan to get involved in Cambodia's rice development strategy is a bad sign for Vietnam.

China has announced it will lend $300 million to Cambodia to help the country build plants, drying rooms and infrastructure so that it can collect rice from farmers with storage capacity of millions of tons.

Prof Bui Chi Buu, deputy director of the Vietnam Agricultural Science Institute, commented that China decided to get involved in Cambodia's rice development strategy not because of its rice development potential or a plan to turn Cambodia into a rice supply source for China. 

“You will find what the goal is if you analyze the Vietnam-China trade activities recently. As for large-scale rice contracts, China changes its policies so regularly, and forces the prices down. Chinese businessmen go to every corner of the Vietnamese market to disrupt trade activities,” he said.

The expert went on to say that the Chinese strategy would cause difficulties for Vietnam’s rice production and the whole economy.

At present and in the near future, Cambodia cannot compete with Vietnam in rice exports. 

China's plan to get involved in Cambodia's rice development strategy is a bad sign for Vietnam.

Cambodia exports 3 million tons of rice every year; Vietnam 30-40 million tons. Cambodia sells fragrant rice at $700 per ton. Vietnam also exports 3-4 million tons of fragrant rice at high prices.

However, the problem for Vietnam is that Vietnam’s rice exports depend on China as the largest export market. If China helps Cambodia develop rice production, Vietnam is likely to have to lower selling prices.

An analyst said that while Vietnam does not make profits when exporting rice to China, it still exports to the market because of unclear policies. 

“If Vietnam produces rice just for food security, it would only need to exploit the domestic market, bring rice into supermarket chains,” he said, adding that supermarkets now sell rice at VND10,000-12,000 per kilo, higher than the export price to China at VND8,000.

“If Vietnam aims to produce rice for export, it will have to set up clear strategy, make investment in technology and organize production in a professional way,” he said.

Le Van Banh, a renowned rice expert, former head of the Mekong Delta Rice Institute, also warned about the possibility of Vietnam’s rice being put under pressure and forced to lower export prices.

“China can think of a lot of tricks to raise difficulties for Vietnam,” Banh said.

Dat Viet