Agriculture Reference
In-Depth Information
80 more per ton than did Vietnamese rice in the category of 5 percent broken
grains and US$40-50 per ton more in the category of 25 percent broken grains.
However, by 1999 the price difference between Thai and Vietnamese rice of
comparable quality narrowed to only US$10 per ton and had equalized in 2000.
Although relative shares declined after 1999, the country was also able to
expand its export network. Starting mainly with Asian countries in the late
1980s, Vietnamese rice quickly found its way to Europe and North America
(Figure 8.4). In 2000, Vietnamese rice exports to the Middle East made up 30
percent of total exports. Hence, the Middle East has become a big market with
steady demand. According to traders, some European and American companies
also imported small amounts of rice, but mostly to re-export to African markets.
Thus, Africa may also be a potential market for rice.
However, behind these broad trends the question remained of whether the
country achieved these results in the most efficient manner. To answer this ques-
tion, we now look at how export markets operate in Vietnam. Until May 2001,
the Government of Vietnam controlled the volume of rice exports by setting an
annual export quota. The quota had been set each year by the Ministry of Agri-
culture and Rural Development, the state Planning Committee, and the Min-
istry of Trade, based on estimates of domestic supply and utilization.
Until 1997, the rights to export rice under the national quota had been al-
located to the two main regional state-owned trading enterprises—VINAFOOD-
1 (also known as the Northern Food Company) in Hanoi and VINAFOOD-2
(Southern Food Company) in Ho Chi Minh City—and to a number of provin-
cial state-owned trading enterprises (Nielsen 2003). In 1998, the government
allowed private rice millers to apply for rice export quotas. Unfortunately,
millers had to meet very strict requirements, which resulted in limiting private-
FIGURE 8.4
Share of rice exports in Vietnam, by region (percent)
Share (percent)
Other
100
90
80
70
60
50
40
30
20
10
America
Europe
Middle East
Asia
1995
1996
1997
1998
1999
2000
