Untitled TON DUC THANG UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION MAJOR INTERNATIONAL BUSINESS FINAL REPORT PRACTICES OF INTERNATIONAL TRADE ANALYSIS OF RICE EXPORT ACTIVITIES IN VIET NAM Lecturer[.]
TON DUC THANG UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION MAJOR: INTERNATIONAL BUSINESS FINAL REPORT PRACTICES OF INTERNATIONAL TRADE ANALYSIS OF RICE EXPORT ACTIVITIES IN VIET NAM Lecturer: Nguyen Thi Tuong Vy Group: Diamond - Ho Chi Minh City, 5th of November, 2020 0 Tieu luan Shift: 03 LIST OF GROUP MEMBERS ST T Full Name Content implementation Evaluatio n Introduction Chapter xxx 100% Synthesis the report xxx xxx xxx xxx Chapter (2.3) Chapter (2.5 + 2.6) Chapter Chapter (2.4) 98% 98% 98% 98% Chapter (1.2.3 , 1.2.4) xxx Chapter (2.1) 0 Tieu luan 98% Sign COMMENTARY OF LECTURER - Content 0 Tieu luan Introduction Chapter 1: Overview of rice export in Viet Nam .6 1.1 Rice production in Viet Nam .6 1.2 Export activity of rice in Viet Nam 1.2.1 Rice export theory 1.2.2 Criteria for evaluating the quality of exported rice 1.2.3 Rice policy in Viet Nam 1.2.4 Supply and demand of Viet Nam rice 11 Chapter 2: Analysis of Viet Nam rice export activity .13 2.1 Process of exporting rice in Vietnam 13 2.2 Procedure of exporting rice in Vietnam 14 2.3 Vietnam export rice price 15 2.3.1 Vietnam’s export rice price and quantity 15 2.3.2 Factor affecting export price 17 2.3.3 The quality and categories of rice export in Vietnam … .17 2.3.4 Export price by market… .… 18 2.3.5 Vietnam's export rice competitors… 21 2.4 SWOT analysis… 22 2.4.1 Advantages analysis… 22 2.4.2 Disadvantage analysis… 23 2.4.3 Opportunity analysis… .23 2.4.4 Threat analysis… 24 2.5 Exporting rice sales contract… .25 2.6 Custom clearance in Vietnam… .27 Chapter 3: The solution of developing export activities…………………………….30 Conclusion 0 Tieu luan Introduction Vietnam is in tcess of international integration Therefore, the development of economic activities is extremely important, including export activities In the current export structure, rice is one of the export strengths of our country Over the past years, Vietnam has always been one of the largest rice exporters in the world, maintained at a relatively high threshold, accounting for a large part of the total rice export value of the world Thanks to favorable natural conditions, culture is a wet rice civilization Vietnam is increasingly developing and asserting its economic strength Especially in 2020, the COVID-19 epidemic spreads strongly, but Vietnam still stabilizes the economy That has made the economy in general and rice export in particular achieve many proud achievements However, we have not fully exploited our strengths as well as limit risks in rice production and export On the other hand, to better understand current and future challenges, then find solutions So we decided to choose the topic "analysis of Vietnam's rice export activities" 0 Tieu luan I Chapter 1: Overview of rice export I.1 Rice production in Vietnam Viet Nam is the 5th largest rice producer in the world In the first seven months of 2020, Vietnam is the country with the second highest output and export value of rice in the world while the context of the spreading Covid-19 epidemic Specifically, rice export in the first seven months of the year reached nearly million tons with a value of $2 billion Vietnam is an agricultural country with a long history of cultivation Rice is the main product of agriculture Rice not only contributes to ensuring people's lives, but also plays a strategic role in Vietnam’s food security Currently, it also contributes a huge part to the value of total export turnover promoting the industrialization and modernization of the country Vietnam has two major deltas, the Red River Delta and the Mekong River Delta In which, the Mekong Delta is the main rice exporter As of September 2019, the cultivated area of winter rice in the whole country reached 1,558.1 thousand hectares, equaling 96.5% of the same period in 2018, of which 1,075.9 thousand hectares in the North, the South reached 482.2 thousand hectares The cultivated area of winter rice in the North in 2019 was low, of which the Red River Delta region reached 497 thousand hectares, a decrease of 19.6 thousand hectares compared to the crop in 2018; The Northern Midlands and Mountains reached 421.5 thousand hectares, down 2.6 thousand hectares; The North Central Coast reached 157.4 thousand hectares, a decrease of 6.3 thousand hectares The main reason is that localities change part of the rice-growing area to use for other purposes In some localities, the area of winter rice decreased significantly: Hanoi decreased by 5.4 thousand hectares; Thanh Hoa decreased by 5.2 thousand hectares; Hai Phong decreased by 2.8 thousand hectares; Phu Tho decreased by 2.3 thousand hectares Up to now, early season rice tea in the North is in the stage of sure grain and ripening, and has harvested 176.5 thousand hectares, equaling 117.2% of the same period in 2018; the productivity was estimated at 50.2 quintal / ha, an increase of 0.7 quintal / The harvest progress of winter rice in 2019 is faster than the same period in 2018 due to being planted early As of October 15, the whole country harvested 888.7 thousand hectares, accounting for 54.8% of the cultivated area and equaling 101.7% of the same 0 Tieu luan period last year Although the weather in the hot season is hotter than the average for many years, due to the alternating rainfall, the water source is guaranteed, farmers actively nurture, rice grows and develops well, and the localities actively to change the crop structure, use quality rice varieties, apply technical advances in production, promptly prevent diseases on plants However, due to the reduction of the cultivated area, the output of winter rice in 2019 reached 8.09 million tons, down 176.6 thousand tons compared to the previous season Along with the care and harvesting of winter rice, localities across the country basically finished the summer-autumn rice production with the cultivated area reaching 2,009.3 thousand hectares, down 43.7 thousand hectares compared to the summer-autumn crop In 2018, in some localities, the area of summer-autumn rice decreased much: Kien Giang decreased 14.4 thousand hectares due to changing the crop structure from summerautumn to autumn-winter; Tien Giang decreased by 11.9 thousand hectares; Binh Thuan reduced by 4.7 thousand hectares; Dong Thap decreased 2.3 thousand hectares According to reports by localities, the whole country's summer-autumn rice yield in 2019 was estimated at 54.8 quintals / ha, an increase of 0.2 quintals / compared to the previous summer-autumn crop, but due to the decrease in cultivated area, the output Overall, the whole summer-autumn crop in 2019 reached 11.01 million tons, down 197 thousand tons Of which, the Mekong River Delta reached 8.7 million tons, down 96.6 thousand tons I.2 I.2.1 Export activity of rice in Vietnam Theory of rice export Export is the activities of selling and transporting goods out of the Vietnamese territory or into a special area located on the territory of Vietnam which is considered a separate customs area under the provisions of law for production and business development Exports are more complex than domestic purchases on the basis of using currency as payment method Exports are the primary activity of foreign trade but play an important role in international business Rice export is the activity of selling and transporting rice out of Vietnam territory to other country in the world Use currency as a payment method Rice export is carried out in accordance with the process and law 0 Tieu luan Rice exports contribute to the economic restructuring of our country, promote rice production, and help solve food and employment problems in Vietnam as well as in the world I.2.2 Criteria for evaluating the quality of exported rice To keep the brand as well as the price of rice exported, the state and enterprises will have criteria to evaluate the quality of rice This is a very important issue to be able to export rice to foreign markets, because each market will have different criteria for importing rice, so the exporters country must pay more attention Table 1.1: Export rice standards 0 Tieu luan I.2.3 Rice policy in Vietnam Rice export is not simply exporting rice to other markets but it must follow strict policies and regulations on export issued by the Government The government has developed many policies to navigate, promote and develop rice production through policies such as: land policies, investment and signals policies, private agriculture policies, domestic rice distribution policies and international trade policies a Land policy From the planned economy to the market economy Vietnam took the first steps to initially grant land use rights to farmers Land policy is seen as a stepping stone, and the first steps are important role In 1988, the government granted farmers the right to use the land for a period of 1015 years and to choose the varieties and crops along with the number of products supplied to the market In 1993, the land law was revised Farmers are allowed to choose the type of land use and duration up to 20 years, but only apply to annual harvest crops Particularly for perennial crops, the term is up to 50 years It can be seen that it is an important criterion to make the effectiveness of rice production continuously increase over the years It is also through allowing people to exchange, transfer, lease, and mortgage From these positive effects, the Government has made policies to promote large-scale commodity agricultural production through parallel farm development While allowing a transformation of production structure based on concentration of land and reduction rice land b Investment and credit policy Over the years, the Government has attempted to renovate the irrigation system, mainly in terms of infrastructure supporting rural production and development to invest in agricultural In the 90s, irrigation investment accounted for 70% of total investment in the agricultural sector, especially is rice in the Mekong River Delta On official rural credit there is Vietnam Bank for Agriculture and Rural Development (VBARD) This is the Vietnam Bank for Farmers and the People's Credit Fund (PCF) to help support rural finance and secure inputs for agricultural production; increase the 0 Tieu luan application of technology in harvesting and exporting agricultural products; support agricultural diversification; rural infrastructure improvement; poverty reduction and natural disaster reduction Ensuring farmers' loans and supporting poor farmers in remote, mountainous areas Particularly for rice growing households, the increase from million to 10 million without collateral c Policy on agricultural materials In the period of economic development, the role of the cooperative system is no longer stable and developing but tends to decline Whereas before that, materials were distributed through cooperatives, materials were traded and provided freely Nowadays, the role of the private economy is gradually replaced and developed, so the distribution of agricultural materials has gradually become important Import tax on fertilizers and pesticides is almost negligible From these positive trends, the Government also encourages farmers to improve rice varieties through the abolition of import tax on seeds, price subsidies for hybrids, and subsidy for seed transportation to reach the target of 70% of new rice varieties The government also implements policies to subsidize transportation of agricultural materials for mountainous areas and to subsidize fuel prices d Domestic rice distribution policy The system is a coherent and unified network However, the rice distribution system in Vietnam is very complicated, with many complicated links between buyers and sellers such as agents, farmers, collectors, millers, wholesalers, retailers and state-owned enterprises Since the 1980s, the policy change has positively contributed to the development of the free rice distribution system in Vietnam Domestic market barriers were removed, allowing free development and competition between agents The private economic sector is increasingly expanding and playing an important role Specifically, the private sector currently accounts for about 95% of the domestic market share, a figure showing that the role of state-owned enterprises in the domestic rice market has decreased e International trade policy In the early 1990s, to ensure national food security, the Government of Vietnam controlled all rice exports through export permits and quotas and allowed only SOEs to export rice 10 0 Tieu luan China is one of the top rice importers of Vietnam In 2017, the amount of rice exported to China reached 2.29 million tons, with 39.5% of the total export quantity In 2018, the amount of rice that China imported was 1.33 million tons and the export value was 683.36 million USD, down by nearly million tons compared to 2017, but China is still the leading country in import Vietnamese rice In 2019, China is no longer the leading rice importer of Vietnam, but instead is the Philippines In the first months of 2019, the Chinese market only imported nearly 224 thousand tons of rice, worth more than 111.3 million, down nearly 74% over the same period in 2018 (according to the Ministry of Industry and Trade - Report of the Export Department import) And at the first months of 2020, the amount of rice exported to China reached 429,261 tons, equivalent to 257.37 million, the average price is 599.6/ton, accounting for nearly 13.9% of the total quantity and nearly 17, 2% of the total rice export turnover of the country; up 92.4% in quantity, up 131.2% in turnover and up 20% in price The Philippines is also one of the top rice importers of Vietnam From 2019 until now, the Philippines has always held its position as the largest rice importer of Vietnam In 2017, the Philippines was Vietnam's second largest rice importer after China, with Vietnam's rice export to the country was 552.9 thousand tons and the export value reached $ 222.6 million, an increase of 40 % compared to 2016 In 2018, Vietnam's rice export quantity to the Philippines reached 1.02 million tons and the export value was 459.52 million USD In 2019, the Philippines became the top rice importer of Vietnam, the amount of rice exported to the Philippines reached 2.13 million tons of rice with a value of $ 885 million, accounting for 38.6% of the country's total exports The output and export value in 2019 will be double that of 2018 In the first months of 2020, the amount of rice exported reached 1.3 million tons, earning 598.61 million USD, equivalent to 459.6 USD / ton Only the amount of rice exported to this country accounts for more than 41% of the total rice export quantity of Vietnam and accounts for nearly 40% of the total turnover, compared to the same period in 2019 an increase of 22.4% in quantity, an increase of 41.4% in turnover turnover and increase 15.5% in price 19 0 Tieu luan Figure 2: Top 10 rice export markets of Vietnam get the most price in the first months of 2020 Source: Vietnambiz, top 10 thị trường xuất nhiều nhât tháng đầu năm 2020 In addition, in the first months of 2020 Rice exports increased over the same period last year Strong increase in some markets such as Senegal with 26 times in quantity and 18.3 times in turnover, reaching 28,435 tons and equivalent to 9.73 million USD Indonesia increased 130.8% in quantity and 192.1% in turnover, reaching 34,986 tons, equivalent to 19.83 million USD Export to France increased 164.2% in quantity and 171.6% in turnover, reaching 1,918 tons, equivalent to 1.11 million USD Rice exports fell sharply in some markets such as Brunei, down nearly 92% in both quantity and turnover, Algeria down 92.9% in quantity and 89% in turnover; Angola reduced 89% in quantity and turnover; Turkey decreased 77% in quantity and 83% in turnover; The US decreased by 75.5% in quantity and 69.2% in turnover 20 0 Tieu luan ... .13 2.1 Process of exporting rice in Vietnam 13 2.2 Procedure of exporting rice in Vietnam 14 2.3 Vietnam export rice price 15 2.3.1 Vietnam’s export rice price and quantity... improvement in Vietnamese rice quality in recent years II.3.2 The quality and categories of rice export in Vietnam a The quality of rice export in Vietnam The price of rice for export increases due to increased... luan Introduction Chapter 1: Overview of rice export in Viet Nam .6 1.1 Rice production in Viet Nam .6 1.2 Export activity of rice in Viet Nam 1.2.1 Rice export