Rice prices plunge despite increased trading

The trading volume of rice has risen strongly in the past few days but the price of the commodity has kept falling, said a rice trader in Tien Giang Province.
After dropping to 7,150-7,300 dong per kg for the dried paddy IR 50404 and 7,400-7,700 dong for the dried long-grain type on November 17, prices in the third rice crop have continued to decrease sharply in the Mekong Delta, the nation’s key rice growing area.

Nguyen Van Tho, a farmer in Chau Phu District, An Giang Province, where the autumn-winter rice is being harvested, said traders were purchasing the fresh paddy IR 50404 at 6,200-6,300 dong per kg, a fall of 200 dong against early last week. In comparison with a half month ago, the prices have dwindled by 600-700 dong per kg for the fresh paddy IR 50404 while those of the dried one have also lost 100-200 dong at 7,000-7,100 dong per kg.

The long-grain paddy categories OM 1490, OM 4218, OM 5451 and OM 4900 are also down by 100-150 dong against November 17 to 7,300-7,550 dong per kg.

Rice trader Nguyen Van Loc in Ba Dac Market, Cai Be District, Tien Giang Province said prices in Long An and Dong Thap where he buys rice had started to fall 100-200 dong per kg on average over mid-November.

Farmer Tho questioned if a sudden drop in rice prices was because rice firms forced farmers to sell their produce at low prices as An Giang and Dong Thap were entering the peak harvest season.

At present, the paddy for producing the 5% broken rice and the paddy IR 50404 are sold at 9,400-9,450 dong and 9,300-9,350 dong per kg respectively, both falling by 100 dong. Rice products have also dipped by 100-150 dong per kg from November 17, with 5%, 15% and 25% broken rice sold at 11,400-11,600 dong, 11,300-11,400 dong and 10,600-10,700 dong respectively.

Local rice enterprises ascribed the price drop to the absence of fresh export contracts. However, the Vietnam Food Association (VFA) said the country had signed deals to deliver one million tons of rice to Indonesia in early 2012.

In particular, the Indonesian state-owned logistics company Bulog in October agreed to import 700,000 tons of rice from Vietnam, which will be delivered next year. Recently, a new contract to export 300,000 tons of 15% broken rice was signed with delivery lasting from next month to February 2012.

VFA said the rice export value had picked up by a slight US$10-15 per ton, from US$505-510 to US$515-525 a ton for the 25% broken rice. The FOB export price of 5% broken rice has only inched up by US$5 to US$555-565 per ton.

Still, compared to the levels in early November, export prices have edged down by US$20-25 per ton.

Previously, numerous rice companies in Cai Lay and Cai Be districts of Tien Giang had to suspend business due to an undersupply. However, they are resuming trade, thus warming up the local rice market.

Thanh Phong, the owner of Van Loi 2 Company, said his firm had restarted operation after a month-long suspension, but it would take some time to reach full capacity.

Rice trading at Ba Dac Market is very bustling despite price falls. A staff member of the rice company Nghia Thoa said a half month ago his firm sold 3-5 tons of rice per day but now the volume had jumped to 7-10 tons.

Saigon Times

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