Rice Prices May Climb About 50% Next Year, Vietnam Food Says

Rice prices may climb about 50 percent next year as demand surges, according to a food official in Vietnam, the world’s second-biggest exporter.

Import demand is increasing after typhoons and drought damaged crops in the Philippines and India, said Truong Thanh Phong, chairman of the Vietnam Food Association. Africa is also seeking more rice from Vietnam, he said.

“World prices may rise to about $800 a ton by the end of the second quarter next year but will not reach the highs of 2008,” Phong said in an interview yesterday in Hau Giang province in the Mekong delta, the biggest rice-growing region.

The export price of Vietnamese 5 percent broken rice is now about $520 a metric ton, Phong said. That compares with $559 a ton for 5 percent broken Thai rice, and $590 a ton for 100 percent grade-B Thai white rice, the regional export benchmark.

Rice futures traded in Chicago have gained 38 percent from this year’s low of $11.195 per 100 pounds in March. The price reached a record $25.07 in April 2008 as concerns over shortages prompted countries like Vietnam and India to curb exports, sparking food price riots across the globe.

The Philippines, the world’s biggest buyer, has scheduled tenders for 2.05 million tons of rice for 2010 supplies after storms destroyed 1.3 million tons of crops. Total imports next year may be 3 million tons in a “worst case scenario,” National Food Authority spokesman Rex Estoperez said on Nov. 23. That’s about 10 percent of estimated global trade.

Vietnam may ship as much as 6 million tons next year, according to Phong. The country will have about 1.8 million tons from this year’s stockpile and a new harvest available for shipment in the first quarter of 2010, he said.

Record Exports

Vietnam expects rice exports this year to be a record 6 million to 6.2 million tons, exceeding the previous all-time high by up to 20 percent, Minister of Industry and Trade Vu Huy Hoang told the National Assembly in Hanoi on Nov. 18.

The Southeast Asian nation shipped 4.65 million tons last year and 5.17 million tons, the previous record, in 2005, according to the General Statistics Office in Hanoi.

Still, slumping prices meant the value of Vietnamese rice exports dropped 6 percent in the 11 months through November to $2.56 billion, even as shipments increased, the Statistics Office reported on Nov. 26. Rice was Vietnam’s sixth-biggest export by value in the first 11 months of the year.

The government is trying to boost rice exports to meet the country’s economic growth targets, Deputy Minister of Industry and Trade Nguyen Thanh Bien said at a rice conference in Hau Giang yesterday. Foreign-currency receipts from exports will ease a dollar shortage in the country, he said.

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