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Rice exports up during first 5 months

Update: June, 05/2013 - 09:34
Bags of rice are loaded at Sai Gon Port for export. Viet Nam's rice exports rose by 5 per cent to US$1.2 billion during the first five months of the year. — VNA/VNS Photo

by Xuan Huong

HCM CITY (VNS) — Viet Nam's rice exports were 5 per cent up at US$1.2 billion in the first five months, according to the Viet Nam Food Association.

Shipments were however 10 per cent up in volume terms at 2.78 million tonnes, Pham Van Bay, the VFA's deputy chairman, told the media in HCM City yesterday.

With supply being abundant in the global market, the average export price in the period was $22.81 per tonne lower than in the corresponding period last year, he revealed.

Asian and African countries were the main markets for Viet Nam's rice, accounting for nearly 62 per cent and 22 per cent of export volumes.

High-grade and fragrant rice varieties accounted for nearly half of the total exports, and low-grade rice for only 11 per cent, he said.

In the domestic market, the average price for long-grain paddy was VND5,289 per kilo at the end of May, and for normal paddy, VND5,043.

The association said global rice prices are not likely to increase in the coming months since supply would remain abundant.

Besides, according to Bay, there has been a recent tendency among major importing countries to increase domestic production.

Thailand is carrying out marketing campaigns to boost exports, he said.

Asked about measures to expand rice exports, VFA chairman Truong Thanh Phong said: "We accept low prices during this period to consume all the paddy grown by farmers."

However, the association has fixed floor prices for two varieties of the grain.

Vietnamese prices are the world's second lowest after Myanmar.

Phong said: "Africa and Asia markets will remain major markets for Vietnamese rice, therefore we will focus more on promotions in these markets."

Bay quoted the US Department of Agriculture as saying China's rice imports this year will surge to 3 million tonnes from 2.34 million tonnes last year, making it the world's largest importer.

According to analysts, China has no shortage of rice supply and the expected surge in imports is due to the price difference between the domestic and global markets, he said.

China's increased imports could also be because the Guangzhou city Food and Drug Administration, in a recent check, found many rice samples containing excessive amounts of cadmium, a heavy metal that can cause changes in the kidneys and other organs, he said.

Phong said: "Viet Nam's traditional buyers will resume rice imports in July."

The country is expected to export 3.55 million tonnes of rice in the first half of the year.

The agricultural sector and local authorities should instruct farmers to grow rice varieties that are in high demand globally, Phong said.

He urged the Ministry of Agriculture and Rural Development to restructure agricultural production to produce less rice but of higher quality.

Rice stocks

The Government is considering stockpiling an additional million tonnes of rice produced during the summer-autumn crop, which will be harvested during July and August.

The Viet Nam Food Association (VFA) has to co-ordinate with provincial people's committees in the Mekong Delta to allocate rice purchase quotas in accordance with rice output from each province.

The assignment was delivered at a recent meeting with relevant ministries by Deputy Prime Minister Hoang Trung Hai.

The move aims to help farmers control their harvest schedule and prevent rice prices from decreasing further, he said.

The plan is similar to that for the previous winter-spring crop.

Relevant ministries and departments were ordered to supervise the rice stockpiling and ensure it was conducted efficiently and according to regulations.

The Mekong Delta is expected to reap 9.3 million tonnes of paddy rice, equivalent to around 4.6 million tonnes of milled rice.

Currently, paddy rice sells for VND3,800 (US$0.18) to VND4,000 ($0.19) per kilo, down VND1,000 ($0.05) from the start of the previous crop.

Domestic rice exporters are now facing great challenges, as global prices in the first quarter dropped over $40 per tonne and continue to fall.

The Ministry of Finance priced the summer-autumn crop at VND4,142 ($1.97) per kilo in the Mekong Delta. Thus, the rice price should be VND5,383 ($0.26) per kilo.

According to Government regulations, businesses must purchase rice at a price that will ensure a minimum profit margin of 30 per cent for farmers. — VNS


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