Analysis of Vietnam’s Rice Value Chain and Entry Strategies
2024
Yi, G.H.
For domestic companies to enter the market, Vietnam’s rice industry value chain and strategies face the following problems. First, farmers outside the Mekong and Red River deltas suffer from low productivity and quality due to a lack of access to new varieties and technology. Second, quality control is difficult because of the small scale of milling companies and collectors. The double milling system increases distribution margins, leading to price hikes. Additionally, low margins for distributors further exacerbate this issue. Third, the government’s export price controls and advance purchase system result in losses and fluctuations in domestic rice prices, negatively affecting exports. The lack of branding and the perception of low-quality rice also diminish international competitiveness. Fourth, the annual import of one million tons through the southeastern border impacts domestic rice prices. To develop rice market in Vietnam, it would be beneficial to integrate production, milling, and distribution. Additionally, collaborating with organizations such as the KOPIA Center to provide cultivation technology support and establish large-scale demonstration complexes should be considered. Additionally, to increase domestic market share, it is necessary to prioritize marketing efforts such as enhancing promotions and building brands, while emphasizing urban consumers’ preferences for high quality and flavor rather than focusing on exports.
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