Record breaking rice

The rice price in Mekong Delta has increased continuously over the last two weeks.

In early November, high quality unhusked rice was traded at 4,800-5,000 dong per kilo. The price increased by 200 dong per kilo on November 10 to 5,200 dong per kilo, and then to 5,350 dong. The price reached 5,500 dong per kilo on November 19 – farmers believed it to be a new record price.

However, the record was broken again five days later, as rice prices exceeded the 6,000 dong per kilo threshold on November 24. Rice was reportedly sold by farmers at 6,150 dong per kilo on November 26.

The sharp price increase means no farmers dare keep rice in stores, because they fear the price may drop one day. During the 2008’s winter-spring crop, the price was very high and then suddenly plunged.

However, analysts say the current situation is quite different from 2008. The rice price has been escalating steadily over the last two weeks with an average price increase of 100-150 dong per kilo every day.

A farmer in Tan Chau town said he sold unhusked rice at 5,750 dong per kilo on November 22. Just two days later, a neighbour of his sold at 6,000 dong and one day later, his brother sold at 6,050 dong.

“I lost 300 dong for every kilo of rice sold,” he complained.

According to a rice exporter in Bac Lieu province, the rice price level at 6,000-6,100 dong per kilo is reasonable if compared with world prices. It is expected that the 25 percent broken rice to be sold to the Philippines will be priced at $540 per tonne CIF and $40-490 per tonne FOB.

Meanwhile, exporters in Mekong Delta say are complaining they are missing out on the opportunity to provide rice to the Philippines. Businesses need to have export contracts for selling at least 50,000 tonnes per contract to the country in the past to be eligible for joining bids.

The Philippines plans to open three bids to purchase 1.8 million tonnes of rice in total in December. From now to April and May 2010, the country plans to import 2.050 million tonnes of rice, mostly 25 percent broken rice. Vietnam is most likely to win the bid.

Chairman of the Thai Rice Exporters’ Association has announced Thailand will provide 300,000 tonnes of rice only. Thai exporters believe rice prices may surge to $1,000 per tonne in the time to come.

Nevertheless, experts warn that this may be just be a Thai bluff . They have advised Vietnamese businesses to be very cautious when deciding whether to sell rice and at what price to sell.

Vietnamese exporters now do not have enough information to make decision, because, as they say, there are too many unknowns

A rice exporter in Soc Trang province said that in order to avoid risks, Vietnamese exporters should sign smaller export contracts instead of selling in large quantities.

VietNamNet/TBKTVN

Tags: Vietnam Rice prices