Finding the Positives in the "Paradox"
In the first nine months of this year, Vietnam exported over 7 million tons of rice, earning $4.37 billion in revenue. Yet, paradoxically, the country also spent nearly $1 billion on rice imports for domestic consumption. The total rice import expenditure is expected to rise further, potentially reaching $1.3 billion by the end of 2024.
At first glance, this situation seems counterintuitive, given that Vietnam has re-emerged as a rising star in the global rice market over the past three decades, firmly securing a position among the top three rice-exporting countries. In the past two years alone, Vietnam’s rice industry has reached record export levels and achieved high prices. At times, Vietnamese rice even surpassed Thai rice in price, making it the highest-priced on the market. Vietnam’s rice sector is transitioning from merely producing rice to becoming a key player in the global rice economy, focusing on quality and branding.
So, why does Vietnam import rice? In recent years, most farmers in the Mekong Delta, Vietnam’s primary rice-growing region, have shifted to cultivating high-quality rice varieties. They’ve embraced good agricultural practices, built strong brands, and targeted the high-end rice market, where prices are significantly higher. Meanwhile, there remains a steady demand for regular, lower-priced rice varieties used to make staple foods like noodles, rice paper, and vermicelli. This explains why Vietnam, despite being a leading rice exporter, imports mid-range rice varieties as raw materials for its domestic food industry.
Statistics show that the average export price of Vietnamese rice in the first nine months of this year was around $624 per ton, up 13.1% compared to the same period last year. In contrast, according to businesses, the cost of imported rice into Vietnam ranges from $480 to $500 per ton. With such a significant price difference between exported and imported rice, Vietnamese enterprises logically opt for lower-priced imported rice for use in the domestic market.
Solving the business equation is about managing supply and demand while weighing costs and benefits. When domestically produced rice is priced higher, it’s only natural for businesses to import cheaper rice for raw material use. From this perspective, spending $1 billion or more on rice imports for domestic consumption, while still profiting from rice exports, is not paradoxical at all. In fact, it makes sound business sense.
Moving Toward a Rice Economy
Vietnam’s rice economy is now being approached from a different angle, marking a historic shift. The rice industry is evolving from a single-sector, single-value system to one that integrates multiple sectors and values, bringing in diverse income streams and benefits. This approach seeks to address long-standing challenges in rice farming, including the unstable income of rice farmers, by balancing economic, social, and environmental interests.
One of the key initiatives driving this shift is a sustainable development plan for 1 million hectares of high-quality, low-emission rice production in the Mekong Delta. This plan is closely linked with green growth and holds great promise for the region’s future. The development of this rice-focused economic zone is being strategically mapped out in a physical space that integrates a range of resources, including natural advantages, financial investments, scientific and technological advancements, and most importantly, human resources. The plan involves close collaboration among key players in the rice value chain: businesses, cooperatives, and farmers.
One promising aspect of this new approach is the potential for additional value through carbon credit sales, as a result of low-emission rice farming. This new economic model not only brings about financial gains but also carries significant social and environmental responsibility.
The question of how much rice Vietnam should import and export for maximum benefit is not solely a matter of numbers or national pride. Instead, it’s a market-driven issue, one that depends on the business decisions of enterprises and market regulation, supported by sound policies. Merely being a major rice exporter doesn't mean a country should not import rice, especially when it makes economic sense to do so.
The future of rice farming and farmers’ incomes in Vietnam must be viewed through the broader lens of a smart agriculture sector and modern rural development. The future lies in linking rice production with businesses and other industries to add value. The era of relying solely on the rice field is over. Vietnam needs to continue pursuing larger-scale production, adopting better technology, and enhancing management practices. Deep processing, innovation, and value creation from rice through the development of post-rice industries, along with branding rice products, can multiply the value of the rice industry many times over.
Vietnam also needs to be prepared for competition in both rice exports and imports, as the global rice market offers new opportunities. Adopting a fresh approach will help Vietnam expand the "rice pie" and carve out a larger share of the rice economy.
Vietnam must shift from a narrow focus on how many hectares of rice are planted or tons of rice harvested, to a broader vision of creating multi-dimensional value from rice. Only by embracing this transformation can Vietnam harmonize interests and create a larger, more sustainable rice economy. The future of the country’s rice sector lies not in the number of tons exported, but in the value that can be derived from each grain of rice.
