Executive Vice President of the Bangkok Bank Suwatchai Songwanich has said Vietnam had a clever rice strategy when importing rice from India after decades.
According to the expert, Vietnam, the world's second-largest rice exporter, this month made a surprising move by starting to import the grain from India.
“Vietnam is importing the cheaper Indian rice to meet domestic demand while saving its output, which is currently selling at a multi-year high, for the export market,” said Suwatchai.
According to the Bangkok Post, Vietnamese rice prices recently outperformed Thailand’s, which was rarely seen for years.
“One reason why Vietnam’s rice prices are doing well is that it concluded a free trade agreement with the EU, opening the door to the lucrative European market,” said Suwatchai, adding that the Regional Comprehensive Economic Partnership (RCEP) that Vietnam signed late last year would also open more markets for higher-priced rice.
“Vietnam is in a good position to take advantage of these opportunities, having worked hard to improve the quality and variety of its rice,” he said.
In addition to producing more high-quality fragrant rice, Vietnamese producers have also been developing varieties targeted to market trends such as soft-textured white rice, as well as reorganising production methods, applying more food safety and quality management, and increasing yields, he said.
These efforts have led to higher yields, better brand recognition, and global accolades, such as ST25 winning the best rice variety at the World Rice Trade Conference in 2019 and coming second to Thailand last year.
According to the expert, Thailand once held the crown as the world’s biggest rice exporter but has now slipped to third place after India and Vietnam.
“Thailand needs to learn from how Vietnam adapted its trade to fit market developments,” he said.
“Thai rice has been losing popularity in recent years as consumers have shifted to softer rice types and the country risks dropping to fifth place over the next decade if it remains complacent and does not develop a more diverse and competitive long-term rice strategy.”
“There are some positive signs that policymakers are taking action on this front. Last year Commerce Minister Jurin Laksanawisit announced a five-year strategy to accelerate the development of 12 new rice varieties: four hard-textured varieties of white rice, four varieties of soft-textured white rice, two varieties of Thai hom mali fragrant rice, and two varieties of high-nutrition rice. However, Thailand will need to do more to regain its crown as the world’s largest rice exporter. To judge from Vietnam’s experience, the entire supply chain needs to be looked at. Thai productivity has also lagged regional competitors for years — local rice yields are about 450 kilograms per rai compared with 960 kilogrammes for Vietnam and two tonnes for China,” said Suwatchai.
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