Has Vietnam bad rice traders?

Vietnam churns out large volumes of rice that is enough for domestic consumption and for export, however, Vietnam’s rice doesn’t always fetch a good price.

So, why is it that Vietnam’s rice is always cheaper than Thailand’s in the world market? Scientists blame it on a perceived inferiority.

 

Tran Dinh Long, Professor, Academician, chairman of the Vietnam Plant Variety Association at the Ministry of Agriculture and Rural Development (MARD), said in a recent interview with newspaper Thoi Bao Kinh te Vietnam, that the quality of Vietnam’s rice is lower than Thailand’s because Vietnam’s national rice varieties are not good.

 

He said that though MARD has spent billions of dong on scientific research, no ‘national rice’ variety has been found. 

 

Meanwhile, economists, however, blame the price difference on distribution networks.

 

Nguyen Dinh Bich, a well known expert of the Trade Research Institute under the Ministry of Industry and Trade (MOIT), pointed out that before May 2008, the gap between Vietnam’s and Thailand’s rice export prices was not big - 10 percent at maximum. However, the gap has widened.

 

And the suggestion is the drop can’t be attributed to rice quality as there couldn’t be such a drop off in such a short time.

 

Bich see the “art of trading” as key and calls on a wider consideration of the issues aimed at bringing the price of Vietnam’s rice closer to Thailand’s.

 

Local newspapers recently quoted officials blaming low rice export prices on small Vietnamese rice exporters offereding unprofitable export prices in order to chase customers.

 

However Bich dismissed the scenario saying it could not be the main reason behind the low rice export price. He said enterprises, which only export tens of thousands of tonnes of rice, cannot lead the market or set prices.

 

Bich added that only the big state-owned general corporations which have large export volumes, can do that.

 

“Is it the general corporations, who are selling rice cheap, who have forced Vietnam’s average rice export price down in the world market?” he questioned.

 

As yet there has been no official report on the losses suffered by Vietnam when rice exporters sell rice at low prices.

 

However, in 2008, director of a rice export company in Can Tho City, estimated Vietnam lost $500 million as it could not take advantage of rice shortages in 2008 when rice prices skyrocketed.