Rice shipments from Vietnam, the world’s second-biggest exporter after Thailand, may exceed the goal for the year as production increases and exporters aim for new markets, including neighbor China.
“Our target is still 7.4 million tons, but we will try to export more given the good crops and price,” Deputy Agriculture Minister Diep Kinh Tan said today. Recent sales to new buyers in China, Indonesia and Bangladesh show improved demand, said Huynh Minh Hue, general-secretary at the Vietnam Food Association.
Increased shipments from Vietnam may help cap a 72% rally in rice futures over the past year, easing global food costs that reached a record in February. Rice has extended gains this month on concern higher guaranteed prices for farmers in Thailand, following an election, will boost export costs.
“At the moment, Vietnam is the only seller,” said Rakesh Singh, a grain trader at Emmsons International Ltd. in New Delhi. “In Thailand, until the government comes out with a clear policy, the farmers are going to hold on to their produce.”
Rice on the Chicago Board of Trade was at $16.855 per 100 pounds at 12:33 p.m. in Singapore after touching $17.07 yesterday, the highest level for a most-active contract since October 2008. The United Nations’ World Food Price Index rose to 233.84 last month, within 2% of its all-time high.
Vietnam’s exports totaled 4 million tons in the January-to- June period, 16% higher than a year ago, the General Statistics Office in Hanoi said yesterday. Both the summer- autumn and winter-spring crops are forecast to top last year’s output, according to the Ministry of Agricultural and Rural Development. Exports last year totaled 6.8 million tons.
“Rice exports will be accelerated since demand is rising from both traditional and new markets such as China, Indonesia and Bangladesh,” the association’s Hue said by phone from Ho Chi Minh City today.
“China has started buying from us after some bad weather hurt their crop, and they will buy more later this year,” Deputy Minister Tan said. China purchased 200,000 tons in the second quarter, according to agriculture ministry data.
Bangladesh and Indonesia are expected to buy more this year, the Thoi Bao Tai Chinh newspaper reported on July 6, citing the association. Bangladesh has contracted to buy 100,000 tons of 15-percent-broken grain rice, with deliveries in July, and Indonesia is in talks to buy 400,000 tons, the report said.
Incoming Thai leader Yingluck Shinawatra, sister of former premier Thaksin Shinawatra, won a July 3 poll on pledges that included raising the guaranteed price of unmilled rice bought from farmers. Her government plans to buy the staple at 15,000 baht ($498) a ton, about 50% above the current level.
That may boost the Thai export price to $810 a ton by Dec. 31, according to the median estimate of six millers, exporters and traders who commented after the Pheu Thai party’s victory. Thailand’s 100% grade B rice, the export benchmark, was set by an exporters’ group at $555 per ton on July 13.
“The current development in Thailand is good for Vietnam,” said Hue from the association, which represents food traders and processors. “If they raise their price, Vietnamese rice will rise as well.”
Vietnam’s exporters will also keep an eye on India, which on July 11 cleared exports of 1 million tons of non-basmati rice, Hue said. “We also want to see how India is going to sell their rice since they said recently that they will.”
Vietnam’s unmilled production is forecast to increase 2.3% to 40.8 million tons in 2011, according to a report from the agriculture ministry in May.
Output from the summer-autumn crop may rise 620,000 tons this year as the planted area expands, the agriculture ministry said yesterday, without giving a total output figure. The winter-spring crop in the Mekong Delta, the biggest producing region, may have risen 300,000 tons to 10.6 million tons, the ministry has said.
The Vietnam Food Association has delayed a plan to stockpile 1 million tons of the grain after growing demand boosted local prices, Hue said.
“We don’t need to do the stockpiling now since prices of unmilled rice have exceeded 6,000 dong (29 cents) a kilo, a very good level compared with the last few years,” Hue said. “The stockpiling plan was designed to ensure the price doesn’t slide below 5,000 dong,” he said