The Thai Government recently introduced a policy of subsidizing fragrant rice and the move has driven up fragrant rice price on the world market and made Vietnamese fragrant rice more popular with consumers as it sells at a more competitive price.

The country’s exports of fragrant rice rose from 216,000 tons in 2010 to 460,000 tons in 2011. Domestic rice businesses exported almost 230,000 tons of fragrant rice in the first five months of this year.

However domestic exporters of fragrant rice say that global demand for the product has not yet reached the levels it did last year.

Experts say that the global price of fragrant rice is being affected by a drop in the global price of standard rice and lower consumer purchasing power.

On top of this, the output of domestic fragrant rice is threatening the country’s overall rice export target, as the acreage of summer/autumn and autumn/winter fragrant rice being grown keeps falling.

To reach the target set for this year, the agricultural sector needs to encourage farmers to increase the acreage of autumn/winter fragrant rice they plant to ensure adequate export volumes, experts say.

Hong Kong and Taiwan are the major importers of Vietnamese fragrant rice, with Hong Kong accounting for half of the country’s total exports of fragrant rice.

Since the beginning of the year, Vietnamese businesses have opened up several new markets in Africa and Asia. An exporter in the Mekong Delta says that Asian countries always increase their imports of fragrant rice at the year’s end as demand soars during the lunar New Year festival, so he remains confident that more contracts for fragrant rice exports will be signed.

However, recently, a group of Chinese businessmen visited the Mekong Delta to source fragrant rice to export to China and they had asked their potential Vietnamese partners to mix equal amounts of fragrant rice and white rice together to raise profits.

The VFA is now calling on its members to ignore these requests and not to damage the prestige of Vietnamese rice or compromise its quality.