Vietnam bites into rice market

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According to Vietnam’s commercial counselor in South Korea Le An Hai, in 2011 South Korea would import 347,658 tonnes of rice.

To carve their names into the list of bidders on rice supply to this market, Vietnamese companies need to meet some conditions. Accordingly, they have to export equal or higher than the bid volume in the last two years which must be verified by the South Korean embassy in Vietnam, follow online bidding procedures and the tender dossiers must be forwarded to the Korea Agro-Fisheries Trade Corporation.

Joining online bidding is a new concept for Vietnamese firms.

“Until present, we have no experience with online bidding as we mainly take part in direct bidding,” said deputy general director of Southern Food Corporation Cao Thi Ngoc Hoa.

Lately, Japan said it wanted to import 250,000 tonnes of rice from Vietnam. However, according to the Vietnam Food Association the country was not in a position to meet the demand.

Deputy minister of Agriculture and Rural Development Ho Xuan Hung attributed the situation to Vietnamese firms’ poor understanding about Japanese market as well as modern business approaches.

Uneven quality is one reason for which Vietnamese rice failed to worm its way into demanding markets.

Southern Food Corporation used to have rice exported to South Korea. It later stopped doing so as this market applied increasingly stringent requirements towards imported rice, Hoa said.

To enter the Japanese market, export rice had to meet over 500 quality indices, said Vietnam Food Association deputy chairman Pham Van Bay. Besides, the exporters incur a fine if their products impinge on those quality indices.

Responding to Vietnamese rice exporters’ concerns, a representative from Daewoo International - South Korean biggest rice importer - said Vietnamese firms needed to be more confident to enhance export rice quality.

A similar lesson was seen in the case of Vietnamese rice exported to Hong Kong. Formerly, Hong Kong’s top-grade rice market share was held by Thailand. However, from 2010 until present Vietnam was the leading rice exporter to this market thanks to its affordable quality products.

According to Vietnam Food Association, as of May 4, 2011 Vietnamese firms inked contracts to export around four million tonnes of rice. The rice export volume for the whole year is forecast at 6.5 million tonnes. With this export volume, Vietnam continues to be the second largest rice exporter worldwide after Thailand.