Rice prices surge as export turns active

Prices of rice in the domestic market have recovered as exporters have boosted their purchases thanks to positive signs of export markets in the third quarter.

Low-grade IR 50404 paddy (unhusked rice) in the Mekong Delta province of Dong Thap now sells for VND4,200-4,250 per kilo, rising VND200 against last week, while IR 50404 rice is priced at VND6,600-6,650 per kilo, surging VND250, said Duong Van Men, a rice dealer in the province’s Lap Vo District.

Ngo Ngoc Yen, director of HCMC-based rice trading firm Yen Ngoc, said prices of IR 50404 rice are now around 6,600-6,700 per kilo while high-grade rice is priced at VND7,700-7,800 per kilo at Ba Dac wholesale market in Cai Be District of Tien Giang Province in the delta.

“Summer-autumn rice has yet to enter its harvest season and due to rainy weather, supply has been dwindling while the demand among food traders has increased, leading to the price hike in the domestic market,” she explained.

Lam Anh Tuan, director of Thinh Phat Co. Ltd. in Ben Tre Province, said rice prices will continue rising in the coming days but may not soar strongly as supply will be more abundant when the summer-autumn harvest season comes.

Last week, Vietnam Southern Food Corporation (Vinafood 2) won a contract to export 200,000 tons of 5% broken rice to Malaysia at a free-on-board (FOB) price of US$410 per ton.

Recently, local media said the Philippines has decided to buy an additional 200,000 tons of rice after signing contracts to import 800,000 tons of rice from Vietnam on April 15.

Tuan of Thinh Phat Co. Ltd., a member of the Vietnam Food Association (VFA), said the association has not received any official confirmation about the fresh deal of the Philippines, but it is a strong possibility that the country will choose to import Vietnamese rice.

“Asian countries are now being affected by climate change, with their output slipping. On the other hand, Thailand is temporarily halting its rice export to inspect its stockpiles. Therefore, rice importers will switch to Vietnamese rice which has good quality and reasonable prices,” he said.

In the year to date, the country has signed government-to-government contracts to export 1.2 million tons of rice compared to 700,000 tons in all of last year, not to mention the Philippines’ unconfirmed imports of 200,000 tons. In addition, Indonesia, Sri Lanka and Bangladesh now also plan to import rice from Vietnam, he said and predicted that the amount of rice exported through such contracts this year will not be lower than 1.5 million tons.

According to some enterprises, rice export in the third quarter may also pick up as dealers will boost their small-volume shipments through border gates to China.

Vietnamese 5% broken rice is now quoted at US$405-415 per ton and 25% broken rice at US$355-365 per tons, while jasmine rice is exported at US$575-585 per ton on global markets, increasing by an average US$10 per ton compared to early this month.

In the year to June 20, member enterprises of VFA had exported nearly 2.9 million tons of rice worth more than US$1.3 billion (FOB).

Source: http://english.vietnamnet.vn