Rice export price remains high

The world will lack 5mil tonnes of rice in 2007, which will push the rice export price up in the remaining months of the year, especially as domestic supply is short, experts say.

Vietnam exported 2.3mil tonnes of rice in the first six months of the year, reaping $731mil, a decrease of 18% in quantity and 6% in value.

The figures released at a recent conference of five countries which control 45% of the world’s exports showed that the world’s food security fund had 76mil tonnes of rice this year (the figure was 140mil tonnes in previous years). In 2007, the world needs 245mil tonnes of rice, while countries can put out 240mil tonnes only.

Experts said that the export price would keep increasing towards the year’s end as a result of the rice shortage.

In the domestic market, though the country is harvesting the summer-autumn crop, the rice price is staying firm at VND2,950/kg as exporters are trying to buy more rice to fulfill export contracts.

Vietnam-sourced rice export price remains high: 5% broken rice is going for $305-307/tonne FOB HCM City port, while 25% broken rice, $290/tonne, an increase of $30-40/tonne over the previous two months.

In 2007, Thailand expects to harvest 29mil tonnes of paddies and export 8.5mil tonnes of rice. Experts have predicted that Thailand-sourced rice will increase in the coming months, and Vietnam’s rice price will be pushed up to closer to Thailand’s rice.

It was initially forecast that Vietnam would have 36mil tonnes of paddies this year (the Mekong River Delta alone has 18.8mil tonnes), but the merchandise paddy left among farmers remains low due to the bad crops caused by the bad weather and insects. The Vietnam Food Association (Vinafood) has asked rice exporters to stop signing export contracts to ensure domestic food security, while export resumption will only be considered in September.

Vietnam’s export price is always $20/tonne lower than Thailand’s products. If considering that Vietnam exports 4mil tonnes a year, it would lose $80mil a year due to the price gap. Now, when Vietnam has the opportunity to narrow the gap as the export price comes closer to Thailand’s it does not have much rice to export.

Tags: Vietnam rice, Vietnam rice exports, Vietnam rice exports 2011