Storms drive up global rice
by Le Hung Vong
A bid to sell 150,000 tonnes of rice to the Philippines won by
the Southern Food Corporation (Vinafood 2) may help raise world rice prices,
local media reports.
On November 4, Vinafood 2 won the rice exporting contract at
US$480 per tonne, much higher than previous deals.
Prices are expected to continue to go up this year, as they did
The Philippines’ scheduled bid to buy 600,000 tonnes of rice on
December 1 could raise prices to $560 per tonne, the Viet Nam Food Association
(VFA) has said.
Local senior economist Nguyen Dinh Bich was quoted by Sai Gon
Marketing as saying that world rice prices have kept increasing.
Prices of Thai 15 per cent broken rice went up from $451 per
tonne in October to $490 on November 13 and then to $495 on November 19, a total
increase of $44 per tonne (9.8 per cent). Meanwhile, price of Viet Nam’s five
per cent broken rice has also increased from $410 per tonne to $460 per tonne
and then $480, representing a record price increase of $70 per tonne (17.1 per
The upward tendency followed the Philippines announced plans to
import some 1.2 million tonnes of rice while other rice producers face the risk
of crop failure.
The Minister of Agriculture of the Philippines was quoted by Sai
Gon Marketing as saying that the world rice price may return to the record price
of 2008 due to the bad weather which has made output decrease sharply and has
forced a number of countries to import the grain.
Bich said under a scenario announced by the US Agriculture
Department, India may ease the rice price fever. In order to make up for the
16.15 million tonnes it lacks, it may release 7.1 million tonnes from its
storage depots into the market.
It may also use 6.1 million tonnes of wheat instead of 4.15
million tonnes of rice.
The Indian Government has said there would be no rice imports
for now. India has scrapped tenders to import rice, saying it has enough stocks
to manage, despite a harvest shortfall following the worst monsoon in almost
The Indian Press Trust reported on November 4 that the
Government of India had mulled over a plan to import 2 million tonnes of rice
from Viet Nam and Thailand because of India’s decreasing rice output due to the
impact of drought and floods.
Two weeks later, the Press Trust quoted an unnamed official as
saying that the Indian government does not want to buy rice at such high prices.
The decision not to import rice marks a U-turn from the Indian
government’s announcement when Commerce Minister Anand Sharma said India was in
talks with Thailand and Viet Nam about buying rice to offset an estimated summer
harvest shortfall of at least 15 million tonnes.
Sharma told reporters on November 20 that the Indian Government
would review the decision if needed.
No response to India’s decision to cancel rice imports has been
heard from VNA. But the association had said last week that the $70 per tonne
world price rise in November was in favour of Vietnamese farmers and exporters.
Vehicle imports rise
Despite Viet Nam’s trade deficit in 2009, imports of cars and
luxury motorbikes have spiked recently.
According to figures from the National Bureau of Statistics, in
November some 9,000 automobiles were imported into Viet Nam, an increase of
3,000 units compared with the same period last year. The sudden influx brings
the total number of automobiles imported into Viet Nam in the first 11 months to
66,300, worth over $1 billion.
In the first 10 months of this year, some 57,300 automobiles
were imported, with total import turnover amounting to $905 million, compared
with a total 92,000 automobiles assembled in the country in the same period.
Consumer trends and changes in tax policy are among major
reasons behind the increase in auto imports. The reduction and exemption of VAT
and registration fees (on imported automobiles) will expire on December 31,
2009, making the VAT return to 10 per cent instead of the current 5 per cent,
and registration fees on imported cars increase to 10-12 per cent of their price
instead of the present 5-6 per cent.
Also in October, some 9,000 luxury motorbikes were imported,
making motorbike imports in the first 10 months of the year reach 94,400 units,
with total import turnover of $112 million.
Meanwhile, the trade deficit has already exceeded the $10
billion figure that the government was trying to stay below for the whole of the
According to figures from the Ministry of Planning and
Investment, the country added $1.75 billion to the deficit in November, bringing
total trade deficit in the first 11 months to nearly $10.2 billion.
With an average trade deficit prediction of $1.5 billion for
December plus the turnover for 68 tonnes of gold imported since November 11, the
deficit for the whole year figure will be much bigger. — VNS