RICE EXPORTS OF HANOI FOOD IMPORT-EXPORT JOINT STOCK COMPANY

Organization chart of Hanoi Food Import - Export Joint Stock Company...26 Figure 2.2: Human resource structure classified by professional qualifications ...28 Figure 2.3: Human resource

NATIONAL ECONOMICS UNIVERSITY ADVANCED EDUCATIONAL PROGRAMME

Class : International Economics Advanced

Educational Program 59A Student’s ID : 11174034

Supervisor : Asoc.Pro.Dr Ngo Thi Tuyet Mai

Hanoi, 2021

STATUTORY DECLARATION

During the internship, I have received many valuable experiences and practicalresearch on the import-export industry- that provides information to complete myinternship report.

I pledge this is my research; Hanoi Food Import-Export Joint Stock Companyhas accurately provided the data and collected results stated in the thesis, whichcorrectly reflects the current situation of the company I am responsible for thedata and documents that I have stated in this thesis

Due to the lack experiences as well as professional knowledge, I still made somemistakes in working process However, with the enthusiastic support of Mr.Hanh - Director of Hanoi Food Import-Export Joint Stock Company, I havelearned numerous useful things and necessary skills to develop for my futurecareer I also appreciate Associate Professor Ngo Thi Tuyet Mai - the supervisorwho wholeheartedly supported me to complete this report

Since my knowledge and experience are limited in the import and export sector,the shortcomings cannot be avoided in my report I look forward to receiving thecomments of the teachers and the examination committee so that my futureresearch project is more complete

I sincerely thanks

LIST OF FIGURES AND TABLES

Figure 2.1 Organization chart of Hanoi Food Import - Export Joint Stock

Company 26

Figure 2.2: Human resource structure classified by professional qualifications .28

Figure 2.3: Human resource structure classified by seniority 29

Figure 2.4.: Rice export market 33

Figure 2.5.: Export Rice Types 34

Table 1.1: Vietnam's rice exports in the first four months of 2020 17

Table 2.1.: Production and business situation of Hanoi Food Import - Export Joint Stock Company 32

LIST OF ABBREVIATIONS

EVFTA European-Vietnam Free Trade AgreementFAO Food and Agriculture Organization

TABLE OF CONTENT

STATUTORY DECLARATION

ACKNOWLEDGEMENT

LIST OF FIGURES AND TABLES

INTRODUCTION 1

CHAPTER 1: THEORETICAL BASIS AND PRACTICAL EXPERIENCE OF RICE EXPORT ACTIVITIES OF HANOI FOOD IMPORT-EXPORT COMPANY IN COVID-19 PERIOD 4

1.1 Vietnam’s rice export activities 4

1.1.1 Rice export concept 4

1.1.2 General Vietnam's rice export situation 10

1.2 Vietnam’s rice export situation 11

1.2.1 General situation of Vietnam’s rice export 11

1.2.2 Government business support policy 17

1.2.3 Company policies to promote rice export activities 20

CHAPTER 2: ANALYTICAL POLICY TO PROMOTE RICE EXPORT ACTIVITIES OF HANOI FOOD IMPORT - EXPORT COMPANY 23

2.1 Company overview 23

2.1.1 History and development of Hanoi Food Import - Export Joint Stock Company 23

2.1.2 Organization of Hanoi Food Import - Export Joint Stock Company 24

2.1.3 Functions and duties of the company 29

2.1.4 Accounting financial situation 30

2.2 Situation of rice export of Hanoi Food Import - Export Company 31

2.2.1 Policies to promote the company’s rice export activities 31

2.2.2 Evaluate the results of the company’s policies 37

2.2.3 Limitations 38

CHAPTER 3: DIRECTIONS AND SOLUTIONS TO IMPROVE THE

COMPANY’S RICE EXPORT PROMOTION POLICY 42

3.1 Development orientation 42

3.2 The company’s goals 43

3.3 Action plan to boost Vietnam's rice exports 45

3.4 Solution of the completing the rice export promotion policy of Hanoi Food Import – Export Company 46

CONCLUSION 48

REFERENCES 49

In recent years, the number of exports of food products in Vietnam has madegreat achievements, especially in the rice export sector Currently, besidesThailand and China, Vietnam has also become one of the largest rice exportingcountries in the world Despite exporting such large quantities, Vietnamese ricegrains are still absent in the market of developed countries Therefore, in addition

to increasing the quantity and quality of exports, the tastes of consumers in eachregion should also be considered

In 2020, the COVID-19 epidemic had a negative impact on global trade in goodswhen supply chains were disrupted, and quarantine measures caused a shortage

of labor The slow delivery has been severely affected in the two largest riceexporting countries in the world, India and Thailand For the first time in threedecades, China, the world's largest rice consumer, had to buy Indian rice inDecember Bangladesh, the world's third largest rice producer, also had to importrice due to domestic prices Geography increased to record levels due to scarcesupply

In the Vietnamese market, 2020 is a favorable year for the rice industry, althoughstill negatively affected by the COVID-19 pandemic At the beginning of thecrop, it was lost due to weather, and the end of the season was drought, causingthe output to decrease by 2%, but the export price of rice increased by more than13%, which is the best increase in Vietnam's rice export history

By researching and analyzing the current situation at Hanoi Food Import - ExportJoint Stock Company, I have partly understood the trading occupation in generaland export in particular Since equitization until now, the company has obtainedmany achievements, asserting its position in the domestic and internationalmarkets I believe that with the current situation, the company will achieve newand great success in the future

By combining the knowledge which I has accumulated during my studies atschool as well as my internship at Hanoi Food Import – Export Joint Stock

Company , I intend to fully accomplish the general internship report This reportaims to give the most general references on the business production activities ofthe Hanoi Food Import - Export Joint Stock Company.

1.2 Detail objective

● Analyzing and assessing the situation of business operations and exportingactivities of Hanoi Food Import – Export Joint Stock Company

● Analyzing and assessing the State’s policies in exporting rice

● Proposing solutions to improve rice exporting activities for at Hanoi FoodImport – Export Joint Stock Company

● Using expert methods, statistics, analysis, comparison, comparison,synthesis, … to assess the current situation of exporting rice and the policies topromote the exporting rice activities at Hanoi Food Import – Export Joint StockCompany in the next coming years.

CHAPTER 1: THEORETICAL BASIS AND PRACTICAL EXPERIENCE OF RICE EXPORT ACTIVITIES OF HANOI FOOD IMPORT-EXPORT COMPANY IN COVID-19 PERIOD

1.1 Vietnam’s rice export activities

1.1.1 Rice export concept

1.1.1.1 Definition of commodity export

Exporting has long become one of the words which is very familiar to manypeople, even those who are not in the economic sector The concept of export is along and indispensable concept in the economic sector of our country

According to Amadeo (2020), export is the sale of goods and services (whethertangible or intangible) to another country on a currency basis as a basis ofpayment in international trade

Hatchett (n.d.) defines export as “sending products to another country inexchange for payment”

According to Shopify (n.d.), the businesses that do the activity of selling theirgoods and services to customers in other countries are exporting Exporting isone way that businesses can rapidly expand their potential market

Market Business News (n.d.) defined that “An export is a product or service that

we sell to a customer in another country The word can be either a verb or anoun Put simply; to export means to sell abroad.”

In general, exporting is considered as an essential part of an economy whichallows the residents of the country to produce goods, employ people, and earnmoney In addition, the receiving country will benefit from the goods due to theirshortage in the supplement of it The currency here can be money of eithercountry or it can be money used in international payments of a certain thirdcountry

According to the regulations on the organization of the management of exportbusiness activities, export business activities must aim to serve the developingdomestic economy on the basis of exploiting and using effectively potential,strengths in labor, land and other resources of the economy, creating jobs forpeople, renovating technical equipment and production technology processes,promoting accelerate the process of industrialization of the country, to meet basicand urgent requirements on production and life, and at the same time contribute

to guiding production, consumption and regulating supply and demand tostabilize the domestic market.

Export is the business and sale on an international scale It is not a single act oftrading, but a complex system of trading relationships, both inside and outside, inorder to profit, promote production of goods, and transform the economicstructure, stabilize and gradually raise the living standard of people Export is anactivity that is easy to bring about sudden effect but can cause great damagebecause it has to confront another economic system from outside that domesticactors in import and export do not easily control

Export means the sale of goods with foreign countries in order to developproduction and business life However, trading here has more complicatedfeatures in the country such as transactions with people of different nationalities,large markets that are difficult to control, buying and selling throughintermediary accounts for a large proportion, currency payments in foreigncurrencies Strongly, goods transported across border gates and border gates ofdifferent countries must comply with international as well as local practices.Export activities are organized with many operations, many stages frominvestigation of foreign markets, selection of import and export goods, tradingtraders, steps of negotiating and signing transactions, completing the payment.Each stage, each of these operations must be fully researched and carefully put in

a mutual relationship, taking advantage of the advantages to ensure the highestefficiency and timely service for domestic consumption

1.1.1.2 The role of rice export

In the trend of integration of the world economy and the demand of foodglobally, the activity of rice export plays a very essential role Rice exporting isthe activity that helps participating countries become more engaged anddependent on each other

- For the economy

Depending on the advantage, the degree of specialization will be different, thelevel of specialization is higher, reducing production costs and other coststhereby reducing costs The common purpose of all countries when conductingrice export is to gain a large amount of foreign currency to be able to importmodern machinery, equipment, to create jobs, increase income and improveliving standards for people This is also a condition to promote economicdevelopment, helping to shorten the difference between countries in the world.Moreover, in the market economy, countries cannot meet all their needs by

themselves, and if they want to meet them, it costs a lot of money, so it isimperative that they cannot stand out but participate in activities To export ricethat we have advantages over other countries, while at the same time being able

to import something that cannot be produced domestically or which can beproduced is too costly

- Job creation, increase income and social stability

The sustainable export of rice contributes to poverty reduction in rural areas,helping to create jobs for farmers When rice is exported more and more withhigher quality, the export value increases, thereby, the farmer's income alsoimproves

- Contribute to environmental protection

The production of rice will affect resources such as land and water becauseresidues of toxic substances released during the production process will affect thenatural environment Therefore, sustainable rice exports will be oriented towardsmodern rice production and export, using technology with less damage to theenvironment such as biotechnology, genetic modification, and sterile fertilizers

1.1.1.3 Types of export

- Direct Export: This is a form of export in which producers, factory companiesand exporters enter into goods trading and exchange contracts directly withforeign partners This form does not go through any intermediaries, can meetdirectly to discuss and discuss to bring up a contract or do not need to meet inperson, but through letters of sale, email, fax, phone, can also form aninternational business sale and purchase contract signed

Strong points of Direct Export: Firstly, through direct discussion, businesseasily leads to unity and less common misunderstandings occur From there,intermediate costs are reduced In many cases, these costs are so great that aprofit sharing is required Secondly, direct transactions will have conditions topenetrate the market, promptly absorb customers' opinions, and overcome

shortcomings Thirdly, it helps to proactively prepare sources of goods andmeans of transport to carry out export activities and promptly adjust consumptionmarkets, especially in volatile market conditions.

Limitations of this form include easy error and price pressure for a new marketthat has never been traded In addition, it also requires employees working in theexport business to have the capacity to understand the foreign trade, foreignlanguage, and culture of the foreign market, which must have a lot of time toaccumulate Moreover, the transaction volume must be large to cover thetransaction costs such as papers, travel, market research

- Indirect export: This is a form of commercial service in which foreign tradeenterprises act as an intermediary to export goods to the authorized units Theexport consignment includes 3 parties: the export consignee, the freightforwarder and the importer The trusting party is not entitled to fulfill theconditions on goods sale and purchase transactions, prices and payment methods,but must go through a third party - the trustee Export consignment is applied incases where an enterprise is not allowed to conduct direct export business or isnot eligible for direct export, entrusting the exporting enterprise to act as itsexporter or exporter Trustees receive a fee called a trust fee

The advantage of this form is to help businesses expand the market to find outputsources for their products It also takes advantage of the trustee's knowledge ofthe consignee in the export business from packaging, transportation, andchartering of ships to buy and understand This will help businesses save moneyand time to invest in exporting In addition, this form also helps the enterprise'sgoods easily penetrate into a new market that we do not know yet, and avoidrisks when we do business in that market

The downside, however, is the loss of the business's direct relationship with themarket (the customer) Besides, businesses must share profits Moreover,sometimes the output depends on the intermediary, affecting production

- Export consignment processing: This is a form of business in which one unitcomes in to import raw materials or semi-finished products for processingenterprises, then withdraw the products for export to foreign countries This unit

is entitled to a trust fee as agreed with the production enterprises

- Convectional trading (export goods for goods exchange): This is a mode oftransaction in which exports are closely linked to imports, sellers and buyers.Volume of goods exchanged of equivalent value Here the purpose of exporting

is not to acquire a foreign currency but to obtain an equal quantity of goods

Although currency is not paid directly, it is used as the general parity of thetransaction The benefits of convective trading are aimed at avoiding the risks ofexchange rate fluctuations in the foreign exchange market At the same time,there is profit when the parties do not have enough foreign currency to pay fortheir imported consignments In addition, for a convective trading country, it ispossible to balance the regular term in the international balance of payments.

- Export according to protocol: This is the form that enterprises export according

to the quotas assigned by the State to export one or a number of certain products

to the foreign government on the basis of the protocol signed between the twoGovernments

- Export at site: This is a new form of export business that tends to develop and iswidely available due to its advantages The characteristic of this type of export isthat the goods do not need to cross the national border, but the customer can stillnegotiate directly with the buyer, but the buyer goes to the exporter On the otherhand, the company avoids some complicated customs procedures, does not have

to hire a means of transport and buys cargo insurance Hence, a large amount ofcost reduction The on-spot export form is being exploited to the maximum bycountries, especially countries with strong tourism strengths and many businessunits and foreign organizations based in that country Great results, not inferior todirect exports across national borders, at the same time with the opportunity toquickly recover capital and high profits

- Outsourcing international: This is a form of business in which one party importsraw materials, semi-finished products (the processing party) from another party(the ordering party) for the processing of the finished product and delivers it tothe ordering party and thereby processing fee is collected This is also a form ofexport that is being strongly developed and is widely applied by many countries,especially the country with abundant labor force and rich natural resources,because it is through outsourcing Job creation and income for workers, they alsohave conditions to innovate and improve new technology machinery to improveproduction capacity For the outsourcer, they benefit from taking advantage ofthe relatively cheap cost of labor and raw materials of the receiving country Thisform of export is mainly applied in labor-intensive manufacturing industries andmaterials such as textiles, footwear

- Re-export: This form is a continuation of the export of goods previouslyimported to foreign countries on the condition that the goods are intact as theywere originally imported This form is applied when an enterprise can not

produce or produce but with a small volume, not enough for export, so it must beimported to re-export A re-export transaction consists of two import and exportactivities with the aim of earning a larger amount of foreign currency initially.The participants are: exporting, re-exporting and importing countries.

The advantage of this form is to create a large market, turn around capital andmeet demand with goods that cannot be met domestically, generating income.The downside of this form is that businesses depend on many exporting countriesfor price and delivery time In addition, it also requires export workers to be good

at re-export business, be sensitive to market conditions and world prices, andstrict precision in sales contracts

- Transaction at the goods exchange This is a special market where throughbrokers appointed by the exchange, people buy and sell goods in large quantities,

of the same nature and interchangeable qualities A Commodity Exchange showsthe concentration of supply-demand relationship on a commodity traded in anarea at a certain time Therefore, the prices published at the exchange can be seen

as a reference in determining international prices

According to Decree 107/2018/ND-CP on rice export business, Tradersestablished and registered for business in accordance with the law are allowed totrade in rice export when they meet the following conditions:

a) Have at least 01 specialized warehouse for storing paddy and rice inaccordance with national standards and technical regulations on paddy and ricestorage, promulgated by a competent authority in accordance with the Law onStandards and Regulations

b) Having at least 01 paddy or rice milling or processing establishmentconforming to national technical standards and regulations on warehouses andrice and paddy milling and processing establishments provided by the agency.Promulgating competence in accordance with the Law on Standards andTechnical Regulations

- Warehouses and establishments that milling, milling and processing paddy andrice to satisfy the business conditions specified in Clause 1 of this Article may beowned by traders or hired by traders from other organizations or individuals thathave a written lease contract as prescribed by law with a minimum lease term of

5 years

Traders with certificates are not allowed to lease or sublease declaredwarehouses, rice milling, milling and processing establishments to prove theirsatisfaction of business conditions in the application for the Certificate

- Traders that only export organic rice, rice products, rice fortified withmicronutrients need not meet the business conditions specified in point a, point bclause 1, clause 2 of this Article, and are allowed to export of all kinds This ricedoes not need a Certificate, does not have to reserve for circulation as specified

in Article 12 and is responsible for reporting as prescribed in Clause 2, Article 24

of this Decree

- When following customs procedures for export, traders that export organic rice,rice products, or rice fortified with micronutrients without a certificate only need

to present to the customs the original or certified copy of the competent agency

or organization the written certification and certification of the competent agency

or organization or the export rice inspection certificate issued by the inspectionorganization in accordance with the law on the product Exported rice complieswith the criteria and methods determined by the Ministry of Agriculture andRural Development and the Ministry of Health as prescribed at Point d, Clause 2,and Clause 3, Article 22 of this Decree

1.1.2 General Vietnam's rice export situation

- Seasonality in the exchange:

Rice production has inherent characteristics of seasonal agricultural production,thus forming the seasonality in the exchange of products in the market That is,the amount of rice supplied in the market is uneven at each time of the year, thisdepends on the planting time To overcome this feature, it is required thatexporting countries always have a plan to preserve and reserve properly to avoidthe situation of excess when the shortage will lead to price pressure

- The majority of rice is consumed locally:

This situation occurs because the production capacity is limited, population size

is large and population growth is rapid Therefore, most of the remaining rice forexchange on the world rice market accounts for only a very small percentage.Developing countries produce 53-55% of the world rice output, Asian andAfrican countries produce the most, accounting for 85% of the world riceconsumption Meanwhile, these countries only provide 4-5% of the rice traded inthe world, Asia is the region that produces the most and also consumes thelargest amount of rice In 1995, minus the amount exported to other continents,the remaining rice consumption in Asia was still 21,4 times higher than America,23,2 times of Africa and 80,5 times of Europe

- Trade between governments is the main method, so the export of rice products

is more stable than industrial goods

The first reason is a national political factor Every country must ensure foodsecurity, if food is not guaranteed, it will have a huge impact on its politics.Therefore, sales are mainly signed between governments through agreements,specific, long-term and quantitative specific agreements, contracts, each year atthe beginning of the crop year Second, some countries use rice export to carryout political intentions through aid, free donation, long-term sale This is mainlydone between governments.

- Major countries play a dominant role in the world rice market:

In the world, only a few countries export with a large and reputable rice volume:Thailand, America, China, Vietnam If the amount of rice exported of thesecountries fluctuates, it can affect the price of rice, leading to fluctuations in thesupply and demand of rice, or it may affect the production situation on othergoods

- In the world rice trade, there are many different types of rice from the riceexporting countries in the world market Corresponding to each type of rice,depending on the quality and different grades, there is a specific price depending

on specific international price selection standards that for many decades, peoplestill charge prices for rice Thai exports make international rice prices Sincethere are many types of rice, when saying the export rice price, it is often clearwhat grade (5% broken, 10% broken ) on which delivery terms

Despite the international price of rice, the price of rice for a specific grade ofrice, among exporting countries, is not consistent: for example, Vietnam's riceprice is often lower than that of Thailand or some other countries although at thesame level This is due to the quality of each type, the reputation of the product,the natural conditions, the source of the rice variety

1.2 Vietnam’s rice export situation

1.2.1 General situation of Vietnam’s rice export

According to estimates of the inter-ministry, rice exports in 2020 will reach 6.15million tons, worth about $ 3.07 billion Although rice exports decreased byabout 3.5% compared to 2019, mainly for the purpose of ensuring national foodsecurity, the export value increased by 9.3% The average export price for thewhole year was estimated at 499 USD / ton, up 13.3% over 2019

In 2020, the export activities in general and rice export in particular will facemany difficulties and challenges, mainly due to the extremely complicatedimpact of the Covid-19 epidemic In this situation, the Government, the PrimeMinister and the Ministry of Industry and Trade have actively implemented many

measures to both ensure epidemic prevention and food security, and removedifficulties for export activities in general and rice export in particular, helpingpeople to consume paddy and rice with the best quantity and price.

Generally in 2019, the country exported 6.37 million tons of rice, equivalent to2.81 billion USD, up 4.1% in volume, but down 8.4% in turnover compared to

2018 Export prices reached $ 440.7 / ton, down 12.1% In 2019, rice exports tomost markets increased in both volume and value compared to 2019, however,the price of rice exported to all markets decreased compared to the previous year

In which, notably there are strong growth markets such as: Senegal increased 577times in volume and 296.8 times in turnover over the same period, reaching53,706 tons, equivalent to 16.91 million USD; Brunei increased 304.5% involume and 279.4% in turnover, reaching 7,868 tons, equivalent to 3.27 millionUSD; Belgium increased 145% in volume and 189.8% in turnover, reaching1,278 tons, equivalent to 0.88 million USD; Angola increased 257.3% in volumeand 138.3% in turnover, reaching 13,459 tons, equivalent to 5.05 million USD

In contrast, a few rice export markets fell sharply, including: Indonesia decreased

by nearly 95% in both volume and turnover; Bangladesh decreased 76% involume and 79.4% in turnover; Turkey decreased 70.9% in volume and 75.8% inturnover

Up to now, it can be seen that both major goals set by the Government and thePrime Minister for rice production and export have been achieved Food security

is absolutely guaranteed in 2020, even in the most difficult times, when theepidemic breaks out and foreign buyers increase strongly to buy rice fromVietnam According to estimates of the inter-ministry, rice exports in 2020 willreach 6.15 million tons, worth about $ 3.07 billion Although rice exportsdecreased by about 3.5% compared to 2019, mainly for the purpose of ensuringnational food security, the export value increased by 9.3% The average exportprice for the whole year is estimated at 499 USD / ton, an increase of 13.3%compared to 2019 This is the highest average annual price in recent years,bringing great benefits to rice farmers

Vietnam's rice export structure continues to shift to fragrant rice, high quality ricewith higher selling prices and added value At the same time, rice farmers andtraders are also increasingly interested in improving quality, traceability andtowards meeting the strict standards of demanding markets such as the EU,Korea, United States, etc

The results of rice export in 2020 show great efforts of people and businesses inovercoming difficulties and challenges of natural disasters and epidemics tomaintain rice export turnover Besides, there is the close, practical and timelymanagement of the Government, the Prime Minister, ministries and branches.The Ministry of Industry and Trade hopes that with the efforts of all parties, riceexports in 2021 will continue to achieve new achievements, with the ultimategoal of ensuring food security and consuming all paddy and rice Goods to thefarmer at the most profitable price.

In the context of a world economic recession, food security continues to beseriously threatened by the "invisible and unintentional steps" of climate changesuch as droughts, storms, floods, and water sea rise It is understood that the

"miracle" of rice for export deserves to be considered a prominent event of theagricultural sector and of the Vietnamese economy in past 2020

Faced with the complicated developments of the Covid-19 epidemic, demand for

a number of essential goods, including rice, is growing rapidly globally Inaddition to the normal demand that the exporting countries can meet, the demandfor reserves has appeared in large quantities, causing the balance of supply anddemand to be out of balance, the price fluctuates sharply, potentially causing thesocial unrest

According to preliminary statistics of the General Department of VietnamCustoms, in the first 2 months of 2020, rice exports reached 928.798 tons, anincrease of 31,7% In some markets, the export volume increased strongly such

as Malaysia increased 149%, China increased 595% This is the main reasonwhy the price of paddy and rice in the country also fluctuates strongly, increasingabout 20-25% depending on the by category In the conditions of saline intrusion,which is still taking place very harshly, affecting tens of thousands of hectares ofrice cultivation in the Mekong Delta, if exports continue to increase at the samerate as in the past 2 months, Vietnam South will face the risk of lack of rice fordomestic consumption

On the basis of the situation of rice production, supply and demand, and trade inrice as presented, based on the functions, tasks and powers specified in the Law

on Foreign Trade Management and Decree No 107/2018/ND-CP on rice exportbusiness, in order to ensure the objectives and principles of rice export, of whichthe most important thing is to ensure food security, the Ministry of Industry andTrade has proposed to the Standing Government to consider a number of riceexport management plans at the meeting on ensuring food security in the context

of the Covid-19 epidemic taking place on March 23, 2020 In which there aretwo options including temporary delay in rice export; or may also considergranting rice export permits.

Based on the opinions of the ministries and branches, the Prime Minister hasconcluded a number of measures to ensure food security, including suspendingrice export from now until the end of May, 2020

After the Notice of Conclusion of the Prime Minister was issued, the Ministry ofIndustry and Trade received comments from provinces in the Mekong Delta andsome rice exporters about the need for a prices of paddy and rice output in thisyear's Winter-Spring crop as well as actual inventories of the population andenterprises Therefore, the Ministry of Industry and Trade proposed the PrimeMinister to allow the inspection of the amount of inventories in the populationand the amount of inventories in enterprises and to report back to the PrimeMinister for consideration and decision With the approval of the Prime Minister,the Ministry of Industry and Trade, together with the Ministries of Agricultureand Rural Development, the Ministry of Finance and relevant agencies,it willurgently work with provinces, key cities producing and exporting and top riceexporters in Ho Chi Minh City, scheduled for March 26, 2020

From the beginning of the year until now, due to complicated changes of weatherand the slowdown in production and business situation caused by the outbreak ofCOVID-19 worldwide, the agriculture sector in general and rice production inparticular faced with many difficulties and challenges However, thanks toproactively appropriate response plans and efforts in agricultural restructuring,Vietnam's rice production in 2020 has achieved positive results, marking a yearwith many successes Data from world organizations all show that world riceproduction and consumption in 2020 recorded growth According to FAO, worldrice production in 2020 will reach 508,4 million tons, rice consumption in 2020will reach 510,3 million tons, both up 1,52% over the previous year

In the Vietnamese market, 2020 is a favorable year for the rice industry, althoughstill negatively affected by the COVID-19 pandemic At the beginning of thecrop, the crop was lost due to weather, and the end of the season was drought,causing the output to decrease by 2%, but the export price of rice increased bymore than 13%, which is the best increase in Vietnam's rice export history

According to FAO, by the end of December 2020, rice yield was estimated toreach 58,7 quintal/ha, an increase of 0,5 quintal/ha Rice production wasestimated at 42,69 million tons, down 806,6 thousand tons The production

results of the winter-spring crop of the whole country this year were quite goodwith the yield of 65,7 quintal/ha, an increase of 0,2 quintal/ha compared to thewinter-spring crop in 2019 The production reached 19,9 million tons, down593,5 thousand tons.

The summer-autumn rice crop in 2020 has achieved high results in yieldcompared to the summer-autumn crop of the previous year, but due to the effects

of drought, salinity and change of use purposes on rice land, the area undercultivation reduces the total output reduced service This year, the cultivated area

of summer-autumn rice in the whole country reached 1945,1 thousand hectares, adecrease of 64,5 thousand hectares compared to the summer-autumn crop in2019; productivity reached 55,2 quintal/ha, increased 0,7 quintal/ha; productionreached 10,74 million tons, down 205,4 thousand tons In particular, the MekongRiver Delta region has an output of 8,46 million tons, a decrease of 219,1thousand tons compared to 2019 Total rice export volume and value for thewhole 2020 will reach 6,15 million tons and 3,07 billion USD, down 3,5% involume but up 9,3% in value compared to 2019

According to the forecasts of the Ministry of Agriculture and RuralDevelopment, in the domestic market, it is expected that in January 2021, riceprices will continue to remain at a high level due to steady buying demand andespecially demand from market rice warehouses After the long holiday, exportcontracts have not yet signed much

The positive developments in rice prices, new preferential policies from newtrade agreements such as EVFTA have created breakthrough opportunities forrice enterprises Many companies recorded impressive profit growth, somebusinesses reported more than 3 times the profit of the same period last year

In general, in 2020, the price of Vietnamese rice for export will increase due to asharp increase in the type of rice exported from Vietnam in fragrant rice, ofhigher quality From mid-July up to now, Vietnam's rice export prices havecontinuously increased and have now surpassed the prices of rice of the sametype of many countries, surpassing Thailand and India to rise to the top of theworld

In the domestic market, the price of rice and rice in the Mekong Delta provincesincreased in the last month of 2020 Specifically, in An Giang, IR50404 riceincreased by 300 VND/kg to 6,500 VND/kg; OM 2514 rice increased 300 VND/

kg to 6,500 VND/kg; rice is usually at 10,500 VND/kg; Jasmine specialtyfragrant rice at 14,500 VND/kg In Kien Giang, IR50404 rice increased by 200

VND/kg to 7,200 - 7,300 VND/kg; OM 6976 rice increased 300 VND/kg to7,300-7,700 VND/kg; OM 5451 rice increased by 200 VND/kg to 7,400-7,600VND/kg.

In Vinh Long, fresh IR50404 rice increased by 800 VND/kg to 6,800 VND/kg;dry rice increased 200 VND/kg to 7,000 VND/kg; Fresh long grain rice increased

700 VND/kg to 7,000 VND/kg, dry rice increased 300 VND/kg to 7,600VND/kg

Looking back to the whole year 2020, the prices of rice and rice in the MekongDelta market fluctuate in an increasing direction, with rice prices usuallyincreasing by about 1,500-2,000 VND/kg; High quality rice increases by about1,000 - 1,200 VND/kg, depending on the time and season Rice prices fell thelowest around February due to plentiful supply of winter-spring crop and weakconsumption demand

Market

The first 4 months of 2020

Compared to the same period in

2019 (%)

Proportion (%) Volume

(tons)

Value (USD)

Price (USD/ton) Volume Value Volume Value

Philippines 902.061 401.269.683 445 10,75 25,2 42,81 40,5China 273.529 158.045.197 578 130,86 171,88 12,98 15,95Malaysia 220.712 90.716.389 411 5,37 10,84 10,47 9,16Ghana 124.207 59.997.257 483 40,43 39,25 5,89 6,06Iraq 90.000 47.610.000 529 -25 -19,52 4,27 4,81Côte d'Ivoire 88.340 36.388.790 412 -40,04 -44,47 4,19 3,67Singapore 33.097 17.791.258 538 23,24 20,65 1,57 1,8Indonesia 25.925 14.746.125 569 113,23 172,4 1,23 1,49Hong Kong 23.087 12.749.379 552 -55,09 -50,55 1,1 1,29Mozambique 22.620 11.018.642 487 40,65 50,97 1,07 1,11U.A.E 15.539 8.437.488 543 -8,58 -7,88 0,74 0,85Saudi Arabia 8.218 4.494.599 547 -13,44 -13,76 0,39 0,45Taiwan 6.562 3.545.542 540 43,09 67,9 0,31 0,36Republic of

Tanzania 6.461 3.462.941 536 25,53 29,27 0,31 0,35Australia 6.024 3.807.599 632 40,29 35,03 0,29 0,38America 4.638 3.006.053 648 -6,94 -9,77 0,22 0,3Russia 4.280 1.800.667 421 -43,68 -41,19 0,2 0,18

Angola 2.102 969.823 461 -78,68 -72,55 0,1 0,1South Africa 1.872 972.959 520 9,15 8,53 0,09 0,1Poland 1.843 947.304 514 46,39 42,59 0,09 0,1Netherlands 1.733 852.521 492 -1,37 -5,1 0,08 0,09Senegal 1.203 623.472 518 103,55 107,81 0,06 0,06France 975 567.907 582 81,23 90,72 0,05 0,06Chile 448 209.336 467 530,99 290,12 0,02 0,02Ukraine 428 262.950 614 -25,95 -24,81 0,02 0,03Turkey 269 148.227 551 -43,61 -37,42 0,01 0,01Spain 192 92.089 480 30,61 33,16 0,01 0,01Brunei 171 78.654 460 -94,78 -94,11 0,01 0,01Bangladesh 146 71.530 490 -51,17 -58,37 0,01 0,01Belgium 120 62.568 521 -52 -66,04 0,01 0,01Algeria 78 48.204 618 -97,3 -95,9 0 0

(Source: https://vietnambiz.vn/)

Table 1.1: Vietnam's rice exports in the first four months of 2020

1.2.2 Government business support policy

- Reserve and stabilize rice prices before the complicated development of COVID-19 epidemic

At the beginning of March 2020, the Ministry of Industry and Trade sent anexpress letter requesting business enterprises to export rice to reserve andstabilize the price of domestic paddy and rice in the face of unpredictabledevelopments in the world economy

According to the Ministry of Industry and Trade, besides the complexity ofobjective factors, the global rice trade continues to arise, having significantimpacts on Vietnam's rice exports such as: exporting countries and Large riceimports have increased output, import demand decreased from traditionalmarkets of Vietnam (China, Indonesia, Malaysia) These moves are puttingconsiderable pressure on Vietnam's rice exports

In this situation, to ensure the objectives and principles of rice exportmanagement, as well as take measures to cope with price risks, the Import andExport Department (the Ministry of Industry and Trade) issued the expressdispatch No 225 days March 8 requested rice exporters to seriously comply withthe provisions of Decree No 107 on reserve, circulation and price stabilization ofpaddy and rice for domestic goods

Specifically, businesses maintain a minimum circulation reserve equivalent to5% of the amount of rice exported in the previous 6 months in accordance withDecree No 107/2018/ND-CP; to organize the rice distribution system, toimmediately supply the stock of rice in stock and the amount of reserved rice forcirculation to stabilize the domestic market under the direction of the competentState agency.

- Preventing violation of the contract to supply national reserve rice after winning the bid

In early January 2021, in order to prevent enterprises from winning the bid fornational reserve rice but refused to sign contracts, then to export them at higherprices, said Nguyen Van Binh, Director of the Legal Policy Department (GeneralDepartment of State Reserve), said the General Department of Reserve will applycredit scoring for contractors right from 2021

Currently, the State Reserve General Department has built a prestigiousevaluation board for contractors according to 4 groups:

Group 1 is the contractor who fully and strictly comply with the regulations will

be given maximum reputation score; Group 2 is the winning contractor, whennegotiating to sign the contract but not signing, the reputation score will belower; Group 3 is the contractor who won the contract, signed the contract butwhen performing the contract, it did not perform properly or the quality of thereserve delivery was not guaranteed; Group 4 is a bidder that won the contract,signed the contract but quit or performed in progress

Groups 3 and 4 will receive the lowest reputation score and be posted on theNational bidding system “Contractors with a history of violation will bedowngraded and will face disadvantages when participating in bidding in thenear future In the short term, this grading is done with rice bidding, and thenapplied to the bidding for materials and equipment ”, said Mr Nguyen Van Binh.According to Mr Binh, in the long term, the State Reserve General Departmenthas proposed to continue amending the Bidding Law and supplement othersanctions to be more binding on contractors when participating in bidding, notonly buying rice National reserves, which for many commodities and otherfields

The transaction, participation in the supply of rice for the National Reserve iscurrently implemented in accordance with the Civil Code 2015, the Law onNational Reserve 2012 and the Law on Bidding 2013

In case the winning enterprise does not come to sign the contract, the sanctioningmeasure is the collection of tender guarantee If you have signed a contract but

do not perform, or do not deliver a sufficient quantity under the signed contract,the performance guarantee will be collected or a penalty of up to 8% of the value

of non-performance and no participation is prohibited and biden from 3 to 5years according to the Law on Bidding regulations

Earlier in March 2020, many successful enterprises supplied rice for the nationalreserve during the bid opening, but immediately gave up not signing the contract.The reason was that, in March 2020, the COVID-19 epidemic broke out inVietnam, the rice price was pushed up, leading to the situation that manyenterprises won the bid, including state-owned enterprises to export rice abroad

at a higher price

The Ministry of Industry and Trade has just issued Official Letter No.6553/BCT-XNK on promoting rice export in the context of Covid-19 epidemic.Accordingly, in order to continue to remove difficulties for production andbusiness, support those affected by the Covid-19 epidemic and promptly takeadvantage of opportunities from the world market, the Ministry of Industry andTrade decided not to take time is affected by the Covid-19 (equivalent to about 6months) epidemic within 18 months specified at Point d, Clause 1, Article 8 ofDecree No 107/2018/ND-CP on rice export business

The Ministry of Industry and Trade requests the People's Committees ofprovinces and cities to organize the implementation of rice production planning,direct the supply of materials, seed structure, implement farming techniques,improve rice quality to meet response to market needs The aim of this action is

to concentrate on directing the purchase of paddy and rice directly fromproducers and through contracts of associated production and sale of paddy andrice signed with producers according to current State policies in the locality.The cities are proposed to continue to strengthen the monitoring of activities ofrice export traders in the area and promptly report when there are unusualfluctuations At the same time, it is proposed solutions to overcome difficultiesand promote rice export in the province

In addition, the Department of Finance, Agriculture and Rural Development,Industry and Trade and related agencies are instructed to closely monitor thesituation of domestic rice and paddy prices and promptly report to the ministriesand branches when there is any change abnormal motion

Moreover, the Ministry of Industry and Trade requested the Vietnam FoodAssociation continue providing information on the situation of rice supply anddemand, domestic and foreign markets, importers, prices and rice trade forecasts,information on export and consumption of paddy and rice on the website so thatrice-exporting traders have a basis for reference and production and businessorientations.

The Ministry of Industry and Trade recommends that rice exporters need toactively develop raw material areas in accordance with the State's policy toensure building quality raw materials to meet the consumption needs of themarket strictly comply with reporting, responsibility and obligations asprescribed

1.2.3 Company policies to promote rice export activities

Along with the good signal from the high-quality market, our country's riceexport in the first 10 months of last year also marked a strong shift in thestructure of exported rice in the direction of gradually shifting to valuable ricesuch as: fragrant rice, japonica rice, specialty rice This is considered as one ofthe most important factors for the growth of value for rice exports, becauseVietnam has always been in the top of the rice exporting countries in the worldfor many years, but mainly low-grade rice with low prices and exported totraditional markets, which do not require high quality Talking about this issue,Director of Department of Crop Production (Ministry of Agriculture and RuralDevelopment) Nguyen Nhu Cuong said: "The change in the structure of speciescan be seen clearly in localities in the key rice in the Mekong River Delta, whenthe area of aromatic rice and specialty rice has been increasing in recent years

As for fragrant rice varieties, the output of fragrant rice in the whole region isestimated at 5,5 million tons/year, equivalent to about 3,5 million tons of rice.Thus, if the quality standards are fully met, this will be a major source of goodsfor upcoming contracts to the European market

Foreseeing this potential, currently large exporters are also stepping upinvestment in rice quality through the application of scientific and technicaladvances and solutions for preservation and processing For example, Trung AnHigh-Tech Agriculture Joint Stock Company builds clean and organic rice fieldsaccording to EU and US standards At the same time, investing more than 10silos containing German dry rice, can reserve about 30 thousand tons, ensuringthe supply and quality of products as required by partners And Loc Troi Group

is also implementing a roadmap to apply 1,000 drones in agricultural production

by 2024 to bring high efficiency in farming and contribute to ensuring the health

of farmers people

It can be seen that the growth of rice exports from the beginning of the year tothe present together with the changes in market, selling price, type structure are creating a great opportunity for change for our rice industry in the field ofproduction and export to bring higher added value Especially when free tradeagreements related to agriculture are signed and come into effect, it will become

a "springboard" for efforts to expand into new markets and increase thecompetitiveness of this industry Therefore, the focus on improving productquality and making good use of existing opportunities will surely bring a newposition to Vietnamese rice grains in the world market

It is necessary to apply science and technology to rice processing for export Oneimportant factor that limits rice quality is the post-harvest technology Improvepost-harvest technology: pay attention to invest in upgrading harvestingtechnology, post-harvest preservation (using dryer instead of drying paddy bysunlight) To increase investment in the rice milling and processing industry,apply advanced technologies in temporary storage such as using carbon dioxide,nitrogen and cooling technology The system of facilities serving the seedlingsupply, agricultural extension, purchase, preservation, storage, transportation,loading and unloading must be managed according to ISO standards,especially in key areas rice for export

It is also necessary to have a solution for market development In the context offierce competition between countries in rice export at present and in the comingyears, it is essential for Vietnamese enterprises to have an effective system ofsolutions to foreign markets In order to increase the competitiveness ofVietnamese rice grains in the world market, it is necessary to have manysynchronous solutions, not only increasing productivity and quality of domesticproduction to reduce costs, but also expanding and stabilizing market in thedirection of diversification, multilateralization, ensuring trust with customers,enhancing marketing, investing in market research and forecasting Specificsolutions such as: Market research, Selection of target market

It is necessary to have a trade promotion solution Enterprises directlyimplementing trade promotion activities include: market research; Propaganda,introduce products, by implementing advertising campaigns, participating infairs, exhibitions, setting up representative offices abroad,