Page 46 - Regional_rice_report_with_full_bookmarks

PROJECT “NETWORK FOR AGRICULTURE AND RURAL DEVELOPMENT
THINK-TAKS FOR COUNTRIES IN MEKONG-SUB REGION” (NARDT)

Figure 17: The structure of export products in Vietnam and Thailand by value

Source: Author’s calculation from AseanStat and VFA,
Thai rice exporters Association.
Despite producing less than 4% of world rice output, Thailand has risen to the
top of the international rice trade due to its lower population, desired rice strains, and
well-developed infrastructure. Thailand has been competing based on higher quality,
targeting specialized sectors to compete on the worldwide market, with other Asian
nations such as Viet Nam and India manufacturing less priced rice and selling it on the
international market. Organic rice, for example, is becoming more popular in Western
markets and commands a higher price, while high-grade Thai Jasmine rice, especially
the famous Thai Hom Mali kind, is favored by rich Asian and North American consumers
and charges a higher price than other grades (Oxford Business Group, 2017).

Like Thailand, Vietnam are building its brand in high-value products and
penerating into developed countries. This has been shown in the change of product
structure (Figure 12). Vietnamese exporters are focusing on high-value products like
fragrant rice, expanding niche markets like Japonica rice, and reducing traditional rice
products like Indica, especially low-grade Indica. In 2013, Indica still accounted for
71.61% of the export value, which has decreased to only 45.43% in 2020. Meanwhile,
high-value rice products such as brown rice, sticky rice, and fragrant rice have
expanded their market share from about 20% to more than 30% in 2020. At the
same time, Japonica rice has penetrated to the niche market, many localities grow
Japonica variety meeting export requirements of the Australian market. The value of
Vietnamese rice is also reflected in the FOB export price. In addition to exporting rice,
Viet Nam has also increased the export of food processed from rice such as vermicelli,
noodles, rice flour, cereals, rice paper, etc. The value of these products is much higher
than rice. Export turnover of food processed from rice in 2020 reached 202 million
USD, 2.3 times higher than the year 2015.

Although Cambodia does not have a diversified export structure, it has
followed Thailand’s strategy in building brand for high-value rice since its started
exporting rice. Fragrant rice has been the main rice type of Cambodian. According to
IFC (2015), In 2013, Cambodia set milled rice standards for both white and fragrant
rice. These standards, which were established by Royal Decree, established quality
assurances that have gained international recognition and trust from global customers.
Cambodia’s rice sector is increasing yields and earnings, as well as its reputation for
producing superb fragrant rice, thanks to improved agricultural techniques and milling

45