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VietNamNet Bridge – While many countries are importing more and more rice,
the rice prices in the world market keep increasing. This means that Vietnam
will have more opportunities to export rice in 2011. However, experts believe
that Vietnam’s exporters will not be very busy the next year.
The US Department of Agriculture (USDA) has estimated that this year’s rice
output would be 451.4 million tons, or 1.1 million tons lower than the demand.
It believes that 2010 would be the first year in the last four years which
witnesses a shortage in
The short supply has led to the sharp increase in the price of Thai rice, which
has been used as a price index reference in Asia. Thai price has increased by 20
percent from the price level in July 2010.
A lot of rice importers have to purchase in bulk for fear that the prices may go
up further. The Philippines has requested to extend the intergovernmental rice
purchase agreement. The country plans to import 1.5 million tons of rice from
Vietnam. Bangladesh also plans to import 300,000 tons of rice from Vietnam in
the first quarter of 2011, and Indonesia has ordered 200,000 tons of rice.
Meanwhile, according to Cao Thi Ngoc Hoa, Deputy Director of Vinafood 2, a big
rice exporter, other countries such as Iran and Iraq have been continuously
opening bids to seek sources to import rice import.
However, Trinh Van Tien, a rice expert from the Institute for Policies on
Agriculture and Rural Development, said that though the information shows big
opportunities for Vietnam to export rice, Vietnam may not be able to earn big
money in 2011.
Tien said that the weather in Vietnam is really bad and flooding in the central
region has forced delays in the crop schedule. Meanwhile, the north is facing
droughts. Fertilizer prices have been increasing steadily. Therefore, it is
difficult to calculate the rice output of the whole country in the time to come.
In general, contracts to export rice always extend deadlines for deliveries.
Therefore, if the crops in the importing countries are good, the importers in
the countries may look for reasons to break the signed contracts.
In the domestic market, the high export price has pushed the domestic price up.
The normal rice price in Mekong Delta is hovering around 6000-6200 dong per
kilo, while long grain rice is 6150-6350 dong per kilo. The price of the rice
used for making five percent broken rice is 8250-8400 dong per kilo, while the
price of rice used for making 25 percent of broken rice is priced at 8100-8250
dong per kilo.
Most recently, the Vietnam Food Association has decided to raise the floor
prices for exporting for the sixth time this year (rice exporters must not
export rice at the prices lower than the floor prices). Five percent broken
rice, for example, has seen the price up from $475 to $540 per ton, 25 percent
broken rice by $35 to $480.
“This should be seen as a move to restrict the export volume of enterprises in
the time to come,” Tien said.
On January 1, 2011 the new decree on rice trade and export management takes
effect. Under the decree, rice exporters will have satisfy many requirements.
For example, they must have at least one depot with a minimum capacity of 5000
tons and an unhusking workshop with a minimum capacity of 10 tons of rice per
hour.
This is also one of the reasons which makes Tien believe that Vietnam’s rice
export industry will not be very busy until the third quarter of 2011.
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