Thailand’s higher rice price seen buoying Vietnam exports
Vietnam’s rice exports have been sluggish since last month. Pham Quang Dieu, chief economist of market research firm AgroMonitor, told the Daily that the rise in Thai rice price might lead to a surge in the flagging rice export shipments.
Thai rice this week has risen to US$520 per ton, the highest in the year to date, according to the Thai Rice Exporters Association.
Dieu said the Thai rice was seen jumping 50% by the end of the year under a plan by the party favored to win the July 3 election to buy the grain directly from farmers. Yingluck Shinawatra’s Pheu Thai party intends to reintroduce a policy adopted by her brother, former PM Thaksin Shinawatra, to buy unmilled rice at 15,000 baht (US$496) per metric ton, twice the current level.
Cao Thi Ngoc Hoa, deputy general director of State-owned Vietnam Southern Food Corporation (Vinafood 2), said exporters were also looking forward to this tentative move as it could have a positive impact on Vietnam’s rice exports.
On the local market, paddy (unhusked rice) for producing 5% broken grains ranges from VND7,500 to VND7,700 per kg, or nearly 37 U.S. cents per kg, the level that has remained unchanged since early June, according to millers and traders in the Mekong Delta province of Tien Giang.
In May, the Philippines emerged as Vietnam’s biggest rice importer, according to Vietnam Customs statistics. The volume of rice bought from Vietnam by the Philippines in May trebled from the previous month to 310,000 tons worth US$145 million.
However, other key importers including Malaysia, Indonesia and China cut rice purchases from Vietnam by 30% to 50% from the previous month. This pulled down the nation’s May shipments to 644,000 tons valued at US$314 million, down 18% in volume and 14% in value from a month earlier.
Demand is running low while supply is soaring, buoyed by the summer-autumn rice crop harvest in the Mekong Delta.
Vietnam also stands a chance of boosting rice exports to Africa as it signed the memorandum of understanding to ship the first 50,000 tons of the total 100,000 tons of rice to Sierra Leone in Hanoi early this week.
Vietnam will be shipping the 100,000 tons to the African nation in 2011-2015. Vu Huy Hoang, Minister of Industry of Trade, told a recent teleconference that African markets would be the next targets of Vietnamese rice exporters in the coming time since many of the country’s traditional import markets have become uncertain.
