Rice production - trading - marketing & current situation

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marketing rice by Dr.Ho Cao Viet

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Rice production - trading - marketing & current situation

  1. 1. Rice production – trading – marketing & current issues Ho Cao Viet (PhD) Institute of Agricultural Sciences for Southern Vietnam (IAS) Department of Economics & Agricultural Development
  2. 2. Production & Consumption Production Consumption Source: USDA, 2013 Unit: thousand metric ton 3.9 million hectares
  3. 3. World rice trade Source: USDA, 2013 Unit: thousand metric ton
  4. 4. Rice price in the world (2002-2013) Source: USDA, 2013
  5. 5. Rice exportation to in 2013 (Jan-Nov) Country Amount (Ton) Value(USD) Taiwan 13.083 5,915 Indonesia 112.807 66,023 Philippines 353.069 155,678 Hong Kong-China 141.549 79,947 China 1.764.968 732,281 Malaysia 347.964 176,338 Singapore 280.464 126,238 Algeria 83.249 34,920 Cost d’Ivoire 436.858 177,277 Angola 102.096 41,828 Ghana 299.699 141,392 Other 1.386.903 600,576 Total 5.322.709 2,338,413
  6. 6. Current issues • Cost of production: very high (1,500 USD/ha/crop; # 300 USD/ton of paddy with yield of 5 tons/ha; 160-200 USD/ton in 2010) • Low comparative advantage in term of cost price in comparison to Thailand, India, Pakistan, Cambodia • Natural environment impacts due to chemical overuse (35% of costs)
  7. 7. Current issues • Marketing & trading: – no strategy of brand name for Vietnamese rice – focus on low-price market  low added value – logistic system: very inconvenient – high volume of exportation, low benefit  farmer get loss – vertical coordination (farmer – middleman – trader – exporter): very weak – State-owned food company control over the market  ineffective marketing strategy
  8. 8. Big gap of price Source: USDA, 2013
  9. 9. Marketing channel Farmers Local collectors Miller Traders Retailers Wholesalers Exporter Verticalcoordination Logistics Source: Ho Cao Viet, 2011.
  10. 10. Current issues • Processing: – Size of miller: small-medium (1.5 ton/hour) – 91% of millers (capacity) are small-medium size – State-owned millers dominate processing channel  unfair competition – Private millers: lack of market information & market research; shortage of capital for warehouse investment and stockade; backward technology; less support from government.
  11. 11. Current issues • Production: – Farm size: small-scale (0.3 ha/family) – Mechanization: slowly, difficult to expand – Labor force: seasonal shortage  high wage – Horizontal coordination (farmer-farmer): low bargaining power  selling price is very fluctuation – Input materials price: inflate year by year (>100% in 10 years)  high cost – Climate change: loss 30% arable land in 2050 – Processing product from rice
  12. 12. Structure of production costs, 2010-2011 Source: Ho Cao Viet, 2011. Variety Pesticides Fertilizers Labor-machine Fuels Depreciation & interest Average of 3 rice crops
  13. 13. Structure of production costs by season Variety Pesticides Fertilizers Labor-machine Fuels Depreciation & interest Variety Pesticides Fertilizers Labor-machine Fuels Depreciation & interest Variety Pesticides Fertilizers Labor-machin Fuels Depreciation & interest Source: Ho Cao Viet, 2011. Summer-autumn 2010 Summer-autumn 2011 Winter-spring 2010-2011
  14. 14. Biến động chi phí phân bón, 2010-2011Cost of fertilizers by province Source: Ho Cao Viet, 2011.
  15. 15. Tỷ lệ chi phí phân bón, 2010-2011Proportion of fertilizers cost by province Source: Ho Cao Viet, 2011.
  16. 16. Chi phí các loại phân bón chủ yếu, 2010-2011Cost on types of fertilizers by province Source: Ho Cao Viet, 2011.
  17. 17. Biến động chi phí thuốc BVTV, 2010-2011Cost of pesticides by province Source: Ho Cao Viet, 2011.
  18. 18. Chi phí lao động & máy móc, 2010-2011 Cost of labor & hired machines by province Source: Ho Cao Viet, 2011.
  19. 19. Biến động tổng chi phí, 2010-2011Total cost of rice production by province Source: Ho Cao Viet, 2011.
  20. 20. Biến động giá thành, 2010-2011 Nguồn: Số liệu điều tra 2010-2011. Giá thành 1 Giá thành 2 Unit price Source: Ho Cao Viet, 2011. Unit price 1 (calculate cost of family labour) Unit price 2 (without cost of family labour)
  21. 21. Biến động giá bán lúa, 2010-2011 Nguồn: Số liệu điều tra 2010-2011. Wet paddy Dried paddy Selling price Source: Ho Cao Viet, 2011.
  22. 22. Biến động doanh thu & lợi nhuận, 2010-2011 Nguồn: Số liệu điều tra 2010-2011. Doanh thu Lợi nhuận Gross income & profit Net profit Gross income Source: Ho Cao Viet, 2011.
  23. 23. Rice varieties • Coastal plain region: ST3, MTL233, MTL250 & Jasmine 85 meet standard of rice exportation because of high quality (compared to IR64 & as well as Khao Dawk Mali 105). • Flood plain region: OMCS2000, OM2717, OM2705 are high tolerant to diseases and high quality of rice, high yield (compared to IR64). OM3536 is a fragrant variety. • Plain of reed region: OMCS2000, VNĐ95-20 & Jasmine85 are tolerant to acidity, high quality & yield, adapted to Summer-autumn and Winter-spring crops. OM3536 is a potential variety for acid-sulfate soil to diversify rice material for exportation. Source: Rice project KC06, 2011
  24. 24. Opportunity for cooperation • Market studies and marketing for rice, coffee, catfish… • Branding name for exported agricultural products: rice, shrimp, catfish, coffee • Logistic systems improvement & investment (processing equipments, warehouses…)
  25. 25. Our information • Please contact: – Dr. Ho Cao Viet (head of department) – Phone: +84 908442120 – Email: hocaoviet2000@yahoo.com – Address: 121 Nguyen Binh Khiem Street, District 1, Ho Chi Minh City, Vietnam
  26. 26. Thank you !

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