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High prices put pinch on rice exports
Viet Nam had exported 2.1 million tonnes of rice by mid-April of this year, worth US$1.02 billion, beating the 1.79 million tonnes that were exported in the same period last year, said the Viet Nam Food Association.
In the first half of this month, Viet Nam exported 290,040 tonnes worth $136.3 million, according to the association. Asia had the highest demand for Vietnamese rice, accounting for 42.44 per cent of total exports, followed by Africa, America and Europe.
Last week, the export price of Vietnamese 5 per cent broken rice increased by 4 per cent to $485-490 per tonne against the previous week, and by 22 per cent in comparison with the same period last year.
Nguyen Thanh Long, Managing Director of Gao Viet Ltd Company, said the price of Vietnamese rice was now as high or even higher than Thai rice.
Long explained that this was because companies in Thailand were trying to reduce their stocks and domestic prices were high.
The price of rice on the domestic market has increased by VND1 million ($47.6) to VND5.4 -6 million ($257-285) per tonne against the same period last year. This increase was due to a surge in production costs and low supplies at the end of the domestic rice crop.
Local exporters are feeling the crunch, with domestic prices driving export prices sky high.
If international traders had a choice between Vietnamese and Thai rice at the same price, they would normally go for the Thai product, Long said.
However, Tran Ngoc Trung, Director of Vinh Phat Company, said Vietnamese rice was at an advantage having been freshly harvested, compared to the rice from Thailand that had been in storage for a long time so the quality was not as good.
Vo Tong Xuan, a rice expert, said the drop in price of Thai rice was a temporary measure and the export price of Thai rice was expected to increase soon.
Production costs were increasing and Thai farmers would force their Government to increase the purchasing price of domestic rice, he said.
According to Long, Vietnamese firms will also face competition from cheaper rice from Pakistan.
vietnamnews
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