Stock gets empty; Vietnam misses opportunity to boost rice export
VietNamNet Bridge – The rice demand is increasing in the world market, but Vietnamese farmers have sold out their third-crop rice. Exporters don’t have rice to sell while the Filipino government has opened an invitation for bids.
Rice running out, domestic prices go up
Tran Thi Bong, a merchant specializing in collecting rice in Thoai Son district of An Giang province, said on November 20, export companies paid VND72,000 per kilo for IR 50404 material rice, another increase of VND200 per kilo.
“The price has been increasing partially because farmers have no more rice to sell. The third-crop rice has been selling well because the rains and floods have led to the short supply,” Bong said.
Nguyen Thi Thu Hang, a farmer in Chau Phu district of Dong Thap province, said the price increase does not benefit farmers, because they have sold out rice before, when the prices were low.
“We sold out fresh rice two months ago, when the price stayed at VND4,000 per kilo. With such a low price, we incurred the loss of VND5 million per hectare,” she said.
Tran Thanh Van, Deputy Director of Gentraco, an export company in Can Tho City, has confirmed that he cannot buy rice these days though he has raised the prices.
“We buy 25 percent broken rice at VND7,200 per kilo, an increase of VND200 per kilo over the last week,” Van said.
“The third-crop rice output is just big enough for domestic supply. We cannot compete with the merchants who collect rice from farmers to sell domestically,” he added.
According to Lam Anh Tuan, Director of Ben Tre-based Thinh Phat Food Company, the domestic high prices have pushed the production cost of the 5 percent broken rice for export to $400-410 per ton. Meanwhile, enterprises can sign the export contracts at $370 per ton, which means that they incur the loss of $40 per ton.
Big opportunities missed
Le Thanh Tung, a senior official of the Ministry of Agriculture and Rural Development (MARD), affirmed that the rice output in 2013 would be equal to that of the last year, while the merchandise volume for export would be at 7.2-7.3 million tons.
In the first 10 months of 2013, Vietnam exported 5.73 tons of rice already, worth $2.47 million FOB. If counting on the exports to China across the border, estimated at 1.5 million tons by the Vietnam Food Association, the total export volume has reached 7.23 million tons so far this year.
“The rice volume in stock is modest, which may be not enough to fulfill the signed contracts. Meanwhile, the sale on the domestic market goes well,” Tuan said.
“We fear that we may miss the opportunity to export rice to the Philippines, when the country needs more rice to relive the people in the typhoon stricken areas,” he added.
Also according to Tuan, Vietnam has the opportunity to export rice at $400 per ton. However, exporters can only do this if the Filipino government accepts the deliveries in February 2014, when Vietnam harvests the winter-spring crops.
“If they (the Philippines) want prompt deliveries, we would miss the opportunity,” Tuan said.