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Rice exports gain momentum

Monday, 02 February 2015

Rice exports to China surge 
Rice and paddy prices in the Mekong Delta currently hover around VND4,600-4,700 per kg for high-quality variety and VND 4,500 per kg for IR 40504, up VND 200-300 per kg compared to early April.

According to the Ministry of Agriculture and Rural Development (MARD), one reason is that the growing demand in the export rice market has driven rice prices up by VND 200-300 per kg on average.
Vietnamese rice returns to African market

In late March and early April, Vietnamese businesses won major rice export contracts at good prices.

Rice businesses have planned to export 2 million tons of rice in the second quarter, 500,000 tons more than the set target of 1.5 million tons.

They sold 700,000 tones of rice to multinational groups under a trade agreement under which the price for 25 percent broken rice and 5 percent broken rice exported to the African market is the same as to the Chinese market. This is a boon for Vietnamese businesses who find it difficult to sell the 25 percent broken rice to this market of which Indian businesses have had the lion’s share.

So far, domestic rice businesses have signed contracts to export 3.6 million tons at good prices. To meet domestic consumption, the Philippine Government recently assigned the National Food Authority (NFA) to import an additional 500,000 tones of rice under inter-governmental contracts after having bought 80,000 tonnes including the 25 percent broken rice and 5 percent broken rice from the Vietnam Southern Food Corporation Vinafood 2.

However, the two sides have yet to reach any agreement on prices since there is growing concern about the soaring production costs for farmers and many domestic businesses are not yet ready to buy big volumes of rice.

Market hindrance

In the domestic market, 89 businesses are trying their best to fulfill the target of purchasing 1 million tons of rice for temporary stockpiling by April 15.

On the other hand, experts predict that the price of rice and paddy in both domestic and global markets will increase sharply in the next few months due to the growing demand from importers.

The Indonesian Government is also in the process of negotiation with Vietnam to buy rice under a concentrated contract to make up for the loss of crops caused by pets.

The price of paddy rising in tandem with that of rice in the domestic market is in part due to delivery problems (loading and unloading) and a lack of containers. The mode of transport has been changed, from by ship to by container. Therefore, businesses can only deliver 3,000-5,000 tons of rice per day by container while the previous capacity would be up to 20,000-30,000 tons per day by ship.