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Building brand names for Vietnam’s scented rice
Vietnam is a powerful rice exporter, but its domestic market has been encroached upon by many types of Thai rice. It is because Vietnam’s rice still does not have a good brand name and clear geographical indication.
Since the rice price fever in April, the prices of normal rice have been decreasing. Vietnam's 5% broken rice price fell to $540/tonne in late August 2008.
However, scented rice is staying firmly high in price with scented paddy at VND7,200-7,300/kg and normal paddy at VND4,700/kg.
However, Ho Minh Khai, Director of Co Do Agriculture Company, warned that the area of scented paddies will decrease in the next winter-spring crop as farmers prefer cultivating normal rice, which can be sold easier.
“At that time, Thai and Cambodian scented rice will flock into Vietnam,” Khai said.
The area for scented rice cultivation is now tending to decrease due to high production costs and difficulties in consumption. For example, Vietnamese enterprises have to sign contracts with the export price of $950/tonne to make a profit. However, enterprises can hardy gain such a high price as the specialty rice of Vietnam is still unknown in the world’s market.
Meanwhile, scented rice producers are facing difficulties in selling the rice in the domestic market as the market for scented rice proves to be narrow (scented rice is considered a specialty for high-income earners only), while counterfeit scented rice is selling everywhere.
Selling products with brand names
Khai has been preparing to develop the domestic scented rice market with a cooperation agreement signed with Co-op mart chain in March 2008.
At first, the two sides planned to share expenses and profit. However, Khai has changed his mind. As prices fluctuate all the time, Khai will provide rice while Co-op will package, provided that it shows the geographical indication.
Co Do has 5,664 ha for rice cultivation, 70-80% of which is reserved for scented Jasmine 85, VD20 and ST1. Every year, the company provides 45-50,000 tonnes of commercial scented rice. Moreover, it has a storage house with a capacity of 20,000 tonnes, 63 drying rooms and 100,000 sq m of drying ground, five processing workshops with the capacity of 600-700 tonnes a day.
Khai said that these facilities provide reliable conditions to implement the programme on supplying scented rice to supermarts.
Since July 31, 2008, Jasmine Chau Phu, a kind of scented rice grown in An Giang province, has also been available at 29 supermarts of the Co-op mart chain. Angimex can provide 350,000 tonnes a year, and has a storehouse with the capacity of 70,000 tonnes.
Building brand names for scented rice and selling rice through reliable distributors, like supemart chains, to develop the domestic market has become a new way for many rice producers. However, they still hope to sell scented rice abroad under the big export contracts to be signed between governments.
VNN
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