analysis of demand supply and market price of rice in vietnam

First, the USD price rose again along with the steady increase ingasoline prices in 2012, which seriously affected the production and production of agriculturalproducts; rice is constant

ANALYSIS OF DEMAND,SUPPLY AND MARKET

PRICE OF RICE INVIETNAM

LECTURE : Mrs Lê Thị Thế BửuCLASS:MI17B

GROUP: RED (1)

Nguyễn Huỳnh Gia Hân QS170034Đỗ Thị Lệ Quyên QS170068Nguyễn Khưu An Khang QS170017Võ Lê Diễm Quỳnh QS170055Võ Như Trâm QS170004

II The current state of the rice market in Vietnam 3

1 Vietnamese rice market in recent year 3

2 Rice market forecasting 5

3 Advantages, disadvantages and other weaknesses in Vietnamese rice industry 5

4 Activities of businesses in the industry: 8

5 Government polices 9

6 Solutions 10

III CONCLUSION 11

REFERENCES 11

However, there are two reasons why economic fluctuations significantly affectagriculture worldwide First, the USD price rose again along with the steady increase ingasoline prices in 2012, which seriously affected the production and production of agriculturalproducts; rice is constantly falling in price, making production and export difficult Secondly,in the face of the complicated developments of the global COVID-19 pandemic in recentyears, the agricultural and rice production situation is facing unprecedented difficulties andchallenges in 2019, when the country's rice production is gradually redeveloped and restored.In the face of the apparent fluctuations in rice supply and demand in the Vietnamese market inrecent years, our team decided to implement the topic "Analyzing market supply and demandand rice prices in Vietnam".

1

II DEMAND, SUPPLY AND PRICE OF THE VIETNAMES RICE MARKET1 Theoretical background

1.1 Market

A market is a group of buyers and sellers of a particular good or service The buyers as agroup determine the demand for the product, and the sellers as a group determine the supply ofthe product.

II The current state of the rice market in Vietnam

1 Vietnamese rice market in recent year1.1 Procuduction

According to the General Statistics Office, as of January 15, 2022, the country hascultivated 1,909.8 thousand hectares of winter and spring rice, equal to 104.9% of the sameperiod last year, of which: Northern localities reached 132.1 thousand hectares, equal to201.5%; the southern localities reached 1,777.7 thousand hectares, equal to 101.3%, in theMekong Delta alone, reached 1,436.6 thousand hectares, equal to 100.6% (Huyen, n.d.)1.2 Consumption

According to preliminary statistics from the General Department of Customs, riceexports to foreign markets in January 2022 increased by 3.2% However, they decreased by2.8% in turnover and 5.8% in price compared to December 2021 In comparison to January2021, there was a sharp increase of 45.4% in volume, up 28.2% in turnover but down 11.8% inprice, reaching 505,741 tons, equivalent to 246.02 million USD, the average price of 486.5USD / ton (baodautu.vn, n.d.)

Source: General Department of Customs

Regarding the export market, the Philippines is still a large market of Vietnamese ricewhen importing 234 thousand tons, equivalent to 110 million USD, up 38% in volume andnearly 21% in value compared to the same period last year (baodautu.vn, n.d.)

Ivory Coast has overtaken the Chinese market to the second place in value, withproduction reaching 56,675 tons, equivalent to 23.38 million USD, and the average price of391.9 USD / ton, a firm increase of 424% in volume, up 252.5% in value over the same period.Rice exports to Malaysia also increased sharply by 104% in volume and 67.5% in value over

the same period in 2021, reaching 34,925 tons, equivalent to 16.07 million USD (baodautu.vn,n.d.)

In contrast, rice exports to China in January 2022 unexpectedly decreased by 36% involume and 37% in turnover compared to last year, reaching 37 thousand tons with a value ofnearly 19 million USD (baodautu.vn, n.d.)

Source: General Department of Customs1.3 Price

According to the Ministry of Agriculture and Rural Development (MARD), in the worldmarket, the price of Vietnamese rice updated to today (February 11) remained stable at 393USD / ton for 5% broken rice, 373 USD / ton for 25% broken rice and 328 USD / ton for100% plate rice Meanwhile, Thailand's 5 per cent broken rice continued to fall by $4 a tonneto $405 a tonne, while Pakistan dropped $5 a tonne to $348 a tonne (Gạo Xuất Khẩu Của ẤnĐộ Tắc Nghẽn, Cơ Hội Cho Việt Nam Bán Gạo | Dân Việt, n.d.)

According to preliminary statistics from the General Department of Customs, the averagerice export price in the first month of the year was 486.5 USD / ton, down 11.8% compared tothe same period last year (Gạo Xuất Khẩu Của Ấn Độ Tắc Nghẽn, Cơ Hội Cho Việt Nam BánGạo | Dân Việt, n.d.)

As for domestic rice prices, January 28 prices continued to level off for all rice varietiessurveyed Accordingly, IR 50404 rice is in the price range of 5,300 - 5,500 VND / kg, IR50404 (dry) rice continues to anchor at the mark of 6,000 VND / kg, Dai Thom 8 maintainstrading in the range of 5,900 - 6,100 VND / kg, Nang Hoa 9 does not increase, remains at themark of 5,900 - 6,000 VND / kg, Nang Nhen (dry) keeps the price of 12,000 VND / kg (Giálúa gạo hôm nay 28/1, 2022)

For OM varieties, the purchase price of OM 5451 is about 5,300 - 5,500 VND / kg, OM380 rice remains the same in the range of 5,400 - 5,500 VND / kg and OM 18 rice currentlyranges from 5,900 - 6,000 VND / kg (Giá lúa gạo hôm nay 28/1, 2022)

The price of sticky varieties continues to remain the same as the old price, the intestinalstickiness continues to cost 14,000 VND / kg, Long An sticky (dry) is priced at 6,500 VND /kg and the peel (dry) is priced at 6,800 VND / kg (Giá lúa gạo hôm nay 28/1, 2022)

In An Giang market, rice prices go sideways on a large scale Specifically, rice is usuallyat about 11,500 - 12,000 VND / kg, fragrant rice with long grains anchored at 18,000 VND /kg Nang Nhen rice maintains at the mark of 20,000 VND / kg Huong Lao rice is stagnant at19,000 VND / kg, Soc rice is usually 14,000 VND / kg, and typical white rice costs 14,000VND / kg (Giá lúa gạo hôm nay 28/1, 2022)

2 Rice market forecasting

Vietnam's rice exports will decrease slightly, temporarily moving to the second positionafter two consecutive years of standing and down to third place after Thailand and India withthe export output of about 6.3 million tons because Vietnam is following the strategy on theproject "Restructuring Vietnam's rice industry to 2025 and 2030" clearly defined to 2025 and2030 In 2025, rice export output will only be about 5 million / ton, and the amount of rice willgradually decrease to focus on improving the quality, value and brand of rice in Vietnam Thisis a very right decision, and the business people also very approve and respond to the abovetemple and have opinions, market research as well as monitor the behaviour of consumers,many businesses have transferred white rice to high-quality fragrant rice so that from therewill have a more stable market The quality and the brand are good and not much competition.3 Advantages, disadvantages and other weaknesses in Vietnamese rice industry

- Investment in agricultural science and technology, combined with the acquisition andapplication of scientific and technological achievements in rice countries in the region and theworld, is increasing.

- The system of mechanisms and policies of the State encourages and creates conditionsfor the development of agricultural production.

- Vietnam has joined the WTO This is an excellent opportunity to create favourableconditions for rice and other agricultural products to have equal rights to participate in theworld's agricultural trade market.

- Our country is effectively exploiting tropical agriculture:

+ Focused mainly on two factors: soil and climate In agriculture, people still have asaying: "What kind of land does that plant or potato plant strange fields?" and "Until March,when the rice flowers fall, apply sesame seeds".

+ In the past, our ancestors had learned from such experiences, and today, the distributionof crops and livestock is more and more noticed by economic efficiency.

3.2 Disadvantages

- Irrational structure of agricultural production:

The structure of agricultural products has not been suitable for market demand Witheffective exploitation and use of land and water resources for production, high distribution,productivity and quality of crops and livestock are still low.

- Strong and sustainable agricultural product value chains have not yet been established:The objective and subjective factors for the creation and development of the agriculturalcommodity value chain are very primitive and have not been fully formed; popularizing thelack of organic linkage mechanism between agricultural production and processing, packagingand consumption of agricultural products; The policy to encourage the production andconsumption of agricultural products through contracts under the Prime Minister's DecisionNo 80/2002/QD-TTG dated June 24, 2002, is not strong enough to create close links betweenfarmers and businesses and agribusiness organizations.

- Policies to support the development of domestic production have not created a strongenough incentive to overcome the current weakness of agricultural production.

+ Policies on agricultural land has not been directed towards the same level ofconcentrated agricultural production areas and has not yet promoted the creation of large-scaleproduction units;

+ Policies to support taxes, freight, and other fees have not been fully applied and are notattractive to investors to invest in the agricultural business;

+ Preferential credit policy in terms of the loan amount, lending conditions, and the loanperiod are not flexible to effectively support large-scale production of goods.

+ The investment policy is also not large enough to create infrastructure to meet therequirements of large-scale commodity agricultural production development, especiallyinfrastructure in concentrated production areas of industrial crops and fruit trees

+ The policy on the development of agricultural and human resources is slow to beimplemented and is ignored, making agricultural and human resources unable to meet therequirements of modern production, being cooperative and strictly complying with regulationson hygiene and safety food safety according to WTO commitments;

+ Agricultural science and technology policies have not had enough impact on improvingproductivity, quality and competitiveness of agricultural products Many agricultural productindustries such as split, mulberry, vegetables, fruits, poultry and pig raising lack competitivetechnology in breed, cultivation and harvesting processes, limiting the value enhancementincrease.

3.3 Other weaknesses

+ The industry has not yet focused on serving the needs of suitable machinery andequipment with high labour productivity in agriculture Most post-harvest and agriculturalproduct processing equipment must be imported at high prices, and there is no service manualor warranty, causing many difficulties for agricultural producers.

+ The quality control system for agricultural products and inputs has not yet beenestablished to create a healthy market for agricultural products and inputs The backlog ofresidues of pesticides, antibiotics banned from being used in agricultural products, and thestatus of harmful agricultural materials without instructions for use, which can be freely

imported, are common—causing many difficulties and pressing difficulties for agriculturalproducers and consumers It reduces quality goods and does not meet the requirements forquality and safety for health

4 Activities of businesses in the industry:

In January 2022, most rice enterprises recorded positive business results Inparticular, the profit before tax in the fourth quarter of 2021 of Trung An Hi-techAgricultural Jsc (TAR) increased nearly six times in the same period last year to 46 billionVND TAR's net revenue reached 3,120 billion VND, an increase of 15% compared to 2020;Gross profit reached 282 billion VND, up 32% Revenue from financial activity doubled whilefinancial expenses rose just 12 per cent However, the financial cost tripled, causing thecompany's full-year pre-tax profit to increase only 8% compared to the previous year, reaching107 billion VND (Bao-Cao-Thi-Truong-Gao-Thang-1-2021-16453256191281074711515.Pdf,n.d.)

At Loc Troi Group JSC ( LTG), in the fourth quarter of 2021, LTG recorded revenue ofVND 3,110.1 billion, and profit after tax reached VND 159.72 billion, 12% and 2.3%,respectively, compared to the same period last year In particular, the gross profit marginimproved from 20.1% to 21.4% In the period, gross profit decreased by 6.2% over the sameperiod, corresponding to a decrease of VND 44.1 billion to VND 666.6 billion; financialexpenses increased by 52.8%, respectively by VND36.18 billion to VND 104.68 billion; thecost of sales and management of enterprises increased by 5.2%, respectively increased byVND 22.58 billion to VND 457 billion; other profits increased by VND55.88 billion toVND55.83 billion and other activities fluctuated negligibly Accumulated in 2022, thecompany recorded revenue of VND 10,224.1 billion, and profit after tax reached VND 421.87billion, up 36.2% and 14.4%, respectively, compared to implementation in 2021.(Bao-Cao-Thi-Truong-Gao-Thang-1-2022-16453256191281074711515.Pdf, n.d.)

Vinaseed Group JSC (NSC) also recorded positive revenue andprofit growth results over the same period Specifically, in the fourth quarter, netrevenue reached VND 749 billion, an increase of 12.5% over the same period Meanwhile, thecapital cost increase rate was lower, only 10% leading to gross profit from sales and service

provision reaching VND 248 billion, an increase of 18% over the same period Truong-Gao-Thang-1-2022-16453256191281074711515.Pdf, n.d.)

(Bao-Cao-Thi-5 Government polices

- Resolution No 06-NQ/TW, 05/11/2016, along with previously issued policies on high-techagriculture, such as Decision No 176/QD-TTG dated January 29, 2010, approving the high-tech agricultural development project until 2020; Decision No 1895/QD-TTG, datedDecember 17, 2012, approving the Program on agricultural development of high-techapplication under the National Program on High-Tech Development until 2020.

- They are promoting the implementation of credit policies for agricultural and ruraldevelopment under Decree No 55/2015/ND-CP dated June 9, 2015, Decree No.116/2018/ND-CP dated September 7, 2018, of the Government, Circular Guiding No.10/2015/TT-NHNN dated July 22, 2015, Circular No 25/2018/TT-NHNN dated October 24,2018, and Official Letter No 7378/NHNN-TD dated October 1, 2018, of the SBV on riceexport business loans In particular, focusing on lending models of rice and rice linkage chainsfrom production to product consumption; to promote the implementation of loan programs tosupport the reduction of losses in agriculture according to the Prime Minister's Decision No.68/2013/QD-TTG dated November 18, 2013.

- Decree No 02/2017/ND-CP of the Government on mechanisms and policies to supportagricultural production to restore production of areas damaged by natural disasters andepidemics

- Decree No 98/2018/ND-CP dated August 5, 2018, on policies to encourage productdevelopment associated with the consumption of agricultural products.

- Decree No 55/2015/ND-CP dated June 9, 2015, on agriculture and rural areas credit policies.- Decree No 57/2018/ND-CP dated April 17, 2018, on mechanisms and policies to encourageenterprises to invest in agriculture and rural areas.

- Decree No 58/2018/ND-CP dated June 5, 2018, on agricultural insurance.- Decree No 83/2018/ND-CP dated May 24, 2018, on agricultural extension.- Decree No 107/2018/ND-CP dated August 15, 2018, on rice export business.

- The Law on Cultivation in 2018 and the Government's Decree No 94/2019/ND-CP datedDecember 13, 2019, detail some of the Law on Cultivation on Plant Varieties and Cultivation.