Natural disasters drive up rice prices

Vietnamese rice may hold an advantage on the domestic and world market due to urgent demand for the grain and widespread natural disasters.

The price of rice on the domestic and world markets is expected to continue the increase.

Storm and floods in the centre and a forecast drought in the north pushed the current price of rice up on the domestic market compared to last month. However, rice traders believe the price will increase further but rampant rice price speculation is unlikely.

The average rice price is VND4,800-5,200 (US$0.26-0.29) per kilo at present, VND1,000 per kilo higher than in early October, according to the Viet Nam Food Association.

The association said traders attempting to buy rice for export were facing difficulties as although rice prices were good, farmers had little extra for sale.

Meanwhile, export prices for Vietnamese rice also jumped on the world market due to increased demand from rice importing countries.

Storms and floods in the Philippines have left the country short of rice for domestic consumption, prompting ’their Government to open an auction to import 2 million tonnes between December 2009 and early 2010, the according to association.

Viet Nam won a contract to export 150,000 tonnes of 25-per cent-broken rice with a price of $480 per tonne on November 4 at the Philippine government auction.

The Philippines will hold another auction for an additional 600,000 tonnes of rice which is likely to attract exporters from Viet Nam, Thailand, China, Pakistan, Australia, India and the US.

The export price of rice at the auction will probably rise to $500 per tonne, according to economists.

This had raised optimism for export prices of Vietnamese rice, said the association. The export price of Vietnamese rice could jump to $520-530 per tonne at the opening of the auction on December 1, domestic economists said

The price of rice on the domestic and world markets is expected to continue the increase, according to the Ministry of Agriculture and Rural Development.

The association said Viet Nam signed contracts to export 6.7 million until the beginning of next year. So far, the country has delivered 5.5 million tonnes of its contracted amounts, earning $13 billion.

Viet Nam is likely to export 6.2 million tonnes of rice for this year, the highest volume in the last 20 years.

Tags: Vietnam agriculture, Vietnam business news, Vietnam rice price