Vietnam can see great opportunities to export parboiling rice

Truong Thanh Phong, Chair of the Vietnam Food Association (VFA), said at a recent conference that many countries have placed orders for parboiling rice with Vietnam, which has prompted Vietnam to increase the parboiling rice exports to 300-400,000 tons.

Meanwhile, Tran Ngoc Trung, General Director of Vinh Phat Joint Stock Company, the owner of three rice processing factories and the biggest parboiling rice exporter, said the exports of 100,000-150,000 tons of parboiling rice this year proves to be within reach.

High investments, high sales prices

According to Trung, the parboiling rice factory in Phu Tan, An Giang province alone can provide 30,000 tons or products for export. Of the three rice processing factories of Vinh Phat, only one makes parboiling rice, because parboiling rice factory requires heavy investments.

The Phu Tan factory, which has been operational since early 2011, can make 15,000 tons of parboiling rice a month. This is one of the two parboiling factories in Vietnam. The other, located in Long An province, is owned by a Thai businessman.

According to Trung, a white rice processing factory with the capacity of 30,000 tons would require the investment rate of 100-150 billion dong at maximum. Meanwhile, the investor would have to spend 500-750 billion dong, or five times higher, on a parboiling factory. The investor would also have to spend tens of thousands of dollars more to send staff abroad to learn about how to make parboiling rice for six months.

Vinh Phat’s biggest markets are Bangladesh and the countries in the Middle East. Parboiling rice can make out dried cooked rice which could be eaten with hands; therefore, it has been favored by Islam people. The way of making parboiling rice of Vinh Phat is really complicated: fresh rice is desiccated and then soaked in hot water, steamed and then desiccated again. However, the complicated rice process allows Vinh Phat to sell parboiling rice at high prices.

In general, parboiling rice price is equal to the five percent broken white rice. In April 2011, Thai five percent broken white rice was sold at 770-780 dollars per ton, while parboiling rice was sold at 780-800 dollars per ton. At the time when the five percent broken rice dropped to 450 dollars per ton, parboiling rice still could be sold at 490 dollar per ton.

Trung said that the money he has got from the white rice processing is not big enough for him to set up parboiling rice. In order to set up such as parboiling rice factory, one would have to borrow money from banks. Meanwhile, it is not easy to access bank loans at this moment, especially when bank credit officers still do not understand what parboiling rice means.

Not easy to make profits

According to VFA, the demand for parboiling rice from Islam countries could be up to 3.5-4 million tons a year. Meanwhile, Vietnam may export up to 300,000-400,000 tons or this kind of rice, if VFA encourages its member companies to make heavy investments in making parboiling rice.

A member of VFA is building a factory which makes parboiling rice. Once it becomes operational in Chau Thanh district in An Giang province, slated for 2011, it will have the capacity of 500 tons per day.

In fact, for the last many years, domestic businessmen and foreign partners in the Vietnam-US rice joint venture have been cherishing the plan to make and export parboiling rice. However, they have to arrange business themselves, while they have not got any support from the government.

“I had to prepare for ten years for the parboiling rice factory,” Trung said. “I once planned to set up another factory, but I have canceled the project after hearing that India has resumed its parboiling rice factory.”

The rice joint venture in Can Tho City also said it dares not make parboiling rice. Nguyen Tien Dung, Assistant to Director of the An Giang Plant Protection Company, said that parboiling rice has been favored by the Islam community because of the high nutrition in the rice. However, this kind of rice only fits some specific markets. In case this kind of rice cannot be exported, it will not be consumed in the domestic market.