Rice exports climb to record heights

HCM CITY — Viet Nam’s rice exports in the first seven months rose to a record high of nearly 4.62 million tonnes and fetched US$2.18 billion, the Viet Nam Food Association reported.

It represented an increase of 16.72 per cent in volume and 26.07 per cent in value, Huynh Minh Hue, VFA’s general secretary told a meeting in HCM City yesterday.

The average free-on-board export price during the period was $473.37 per tonne, a year-on-year increase of $35.11, he said.

By July 31, VFA members had signed contracts to export 6.18 million tonnes, meaning another 1.64 million tonnes of the grain had to be shipped this year, he said.

Currently, rice remaining in stock at enterprises was about 1.39 million tonnes, lower than the volume needed to fulfill signed contracts, he said.

The summer-autumn crop was bought up very quickly since many businesses had to meet export commitments while some stockpiled waiting for higher prices, pushing up domestic prices, he said.

But though prices have risen to VND6,650 for a kilogramme of normal rice and VND6,800 for long-grain rice, supply had not met demand, he said.

VFA chairman Truong Thanh Phong said the world rice market was in a "complicated" state.

Thai scenario

The newly elected Thai Government’s promise to increase rice prices to 15,000 baht ($500) a tonne had affected the psychology of businesses and people there, causing an artificial shortage and pushing rice prices up there, he said.

If the new Thai Government kept its promise, Thai export prices would increase to $850 a tonne for white rice and $1,400 for fragrant rice, he said.

This could throw up two scenarios. In the first, importers have to accept high prices to buy Thai rice.

But in the other, Thailand cannot sell its rice, reducing supply from the world’s largest rice exporter.

Phong warned that both scenarios would lead to higher rice prices.

Le Truong Son, general director of the Dong Thap Trading Corporation, and many others at the meeting said while the Thai Government would keep its commitment, the increase would follow a roadmap and ensure there would be no price shocks like in 2008.

Hue said this was an opportunity but also a challenge to Vietnamese exporters, explaining they had the opportunity to expand their markets but there would be more risks from market volatility.

But since domestic consumers would be hit if prices rise too much, appropriate measures were needed to balance export and local consumption, he said.

Market demand

Global demand was expected to remain stable until the first quarter of next year, Phong said, though demand could increase sharply in some markets.

Indonesia would import more from Viet Nam in the fourth quarter and the Philippines would import rice if its stocks diminish or rice yield was hit by natural disaster, he said.

Malaysia and Bangladesh also plan to continue buying rice from Viet Nam this year.

The country was likely to export 2.1 million tonnes in the third quarter and 1-1.3 million tonnes in the last quarter, taking full-year exports to 7-7.3 million tonnes, Phong said.

Rice prices were unlikely to fall until year-end, he said.

He advised rice exporters to sign export deals only when they had the grain in hand

Prices rise

Rice prices in HCM City are rising by VND500 to VND700 per kilogramme compared with last week as a result of price hikes of paddy in the Mekong Delta.

At Van Thanh Market in the city’s Binh Thanh District, bui sua ordinary rice sold for VND10,300 per kilogramme yesterday, VND500 per kg higher compared with last week.

High-quality huong lai (Jasmine) rice sold for VND13,500 per kg, VND700 higher over last week.

According to director of HCM City Food Company Huynh Cong Thanh, the rising price of paddy in the Mekong Delta was the chief reason behind rice price hikes in HCM City.

However, the paddy rice price in the Mekong Delta has not affected the prices of rice sold at stalls selling goods under the city’s price stabilisation programme.

These stalls are selling ordinary rice from VND10,000 to VND10,500 per kilogramme and high-quality rice for VND13,000 to VND13,500 per kilogramme.

The city currently had a very large rice reserve which could meet customer demand, said Thanh. Meanwhile, paddy (unhusked rice) was sold at VND200 -VND300 per kilogramme higher this week compared with last week in the Mekong Delta.

In An Giang Province, paddy for ordinary rice sold on Thursday for VND5,800 to VND6,000 per kg, while paddy for high-quality rice sold for VND6,100 to VND6,900 per kg.

Traders were paying VND6,000 to VND6,300 for a kilogramme of paddy in Hau Giang Province, VND300 – VND400 per kg higher compared with prices in mid-July. Undried paddy sold for VND4,700-VND4,800 per kilogramme.

Nguyen Van Ni, a farmer from Long Phu Commune, Hau Giang’s Long My District, said paddy of all types sold very well in this summer-autumn crop, adding that traders came to each household in Long Phu Commune, asking to buy paddy, both dried and undried, at higher prices compared with last year.

"Due to higher prices, I’ve earned a profit of about VND11.5 million ($558.3) per hectare under this summer-autumn crop," said Ni. — VNS

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