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Vietnam rice export volumes up, revenues down
Publication Date : 09-10-2012
Total Vietnamese rice exports are set to reach 7.5 million tonnes this year, an increase of 300,000 tonnes over 2011, but this year's revenues are not as high as last year, according to figures released by the Vietnam Food Association (VFA).
In the first nine months of the year, local firms signed contracts for shipping 7.2 million tonnes of rice, the largest ever export volume, but export value dropped by 7.9 per cent compared with the same period last year, due to a sharp fall in global rice prices.
Average export price for Vietnamese rice in the first nine months was US$443.3 per tonne, $35.7 per tonne lower than last year.
In September 2012, export rice prices stood at $440 per tonne, down year-on-year by $80 per tonne.
Truong Thanh Phong, VFA Chairman, said bumper crops in rice-producing countries such as Thailand, Vietnam and the US, the return of India as a rice exporter, and the entry of Cambodia and Myanmar into the market forced rice prices down in early 2012.
He said these pressures on rice prices will remain during the last months of the year as supply remains abundant.
Many exporters now have large volumes of rice in stock.
Le Minh Truong, Director of Song Hau Food Co., said he has asked the VFA not to apply a minimum export price for rice so that firms can sell their stock (at lower prices).
However, Le Viet Hai, Director of the Can Tho-based Mekong Co., rejected Truong's proposal, saying a floor price should be set to prevent rice prices from dropping to less than $430 – 450 per tonne for the 5 per cent broken rice variety.
Several industry insiders are hopeful that paddy and rice prices will stabilise in the last months of the year, and are advising firms not to sell at very low prices.
Pham Van Bay, Director of the An Giang Food Import-Export JSC, said the country's rice market would not be "pessimistic" in the last quarter of 2012, as the volume of rice to be exported was not so high at the moment.
Nguyen Trung Kien, Deputy Chairman of VFA, said there was still demand for high-quality rice from Vietnam among African customers.
He said several Asian importers have sought to purchase high-quality rice from Vietnam, so there is "no worry" about consumption in the last three months of the year.
Phong said despite stiff competition from India and Pakistan, there was demand for Vietnamese high-quality rice in African markets as it was more competitive than Thai rice.
He also said that while there was still the potential for Vietnamese rice to be sold to other Asian customers, adding that India and Russia may suspend rice and wheat exports in the near future.
Therefore, Phong said, local exporters should not rush to sell rice at low prices, and should continue purchasing paddy and rice from farmers.