According to a report the VFA tabled at a meeting held in southern An Giang Province late last week, exports of 3.3 million tonnes in the first eight months of the year fetched US$1.43 billion and represented a year-on-year reduction of 13.5 per cent in volume and 10 per cent in value.

More than a million tonnes worth of contracts are on hand as are 1.2 million tonnes of inventory.

Business executives attending the meeting said their inventories were at high prices while global prices have declined, threatening to cause difficulties for them.

For instance, 5 per cent broken rice from Thailand usually sells at above $400 per tonne, but currently stands at $370. Pakistani rice prices have fallen the most -- to around $330.

It is unlikely for domestic prices to go up in a short time despite the contracts to export large volumes, the executives said.

Lam Anh Tuan, director of Thinh Phat Co., Ltd, said rice exports this year would be below expectations.

Thailand's effort to increase exports amid a global slowdown in demand is among the reasons for prices to drop, he said.

The annual global rice trade is around 40 million tonnes a year, and any sudden increase in supply from one source hits the market share of others, he said.

"For this year the VFA set an export target of 6.5 million tonnes, but due to market volatility it has adjusted the target. The new target is 4.9 million tonnes, but nobody can predict anything because we depend on the market. If from now to year-end the market is good, rice exports will be higher.

"But I think rice exports this year will surely be lower than in previous years, with exports via border trade falling the most. China considers rice imports over the border as smuggling."

According to the VFA, rice exports to China reduced by 13.33 per cent in the first eight months of the year.

Firms said the Cuu Long (Mekong) Delta has almost completed harvest of the summer-autumn rice crop and the volume is not high.

Yet paddy prices are not very high because a large volume of Cambodian rice has entered the domestic market.

The country earned $2.68 billion from export of 6.5 million tonnes of the grain last year, a decrease of 3.94 per cent in value despite a marginal increase in volumes as prices dropped. 

VNS