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Bumper crop will not affect rice price considerably
Vietnam is harvesting a bumper winter-spring crop in the north, and summer-autumn crop in the south. However, experts believe that the bountiful crops will not make prices go down considerably.
Domestic market: price decreases exist in short term
According to the Ministry of Agriculture and Rural Development (MARD), the total food output is expected to reach 36.5-36.8mil tonnes this year, enough for domestic consumption (28mil tonnes) and export (4.2-4.5mil tonnes).
As supply has become more profuse, domestic and export rice prices have been decreasing a little since hitting the record high in early 2008. In late June, the rice price decreased by VND500-800/kg compared to the beginning of the month to VND8,500-10,000/kg in the domestic market.
In the world’s market, the export price has been decreasing thanks to profuse supplies from big rice export countries like Vietnam and Thailand. Thailand’s export price has decreased by $20-90/tonne. On June 18, Thailand’s 5% broken rice had contract prices of $760-840/tonne.
Export prices will stay at high levels
In the first months of the year, several countries followed a policy on restricting rice exports for fear of shortage. This has been inflating rice export prices. In the first five months of the year, Thailand’s rice price increased by $610-730/tonne, while Vietnam’s rice by $580-640/tonne over the same period of the previous year. Rice shortages have been occurring in many countries, which shows the very high demand for rice.
Though Vietnam and Thailand are now harvesting crops, the export prices Thailand is offering are still $445-523/tonne higher, while Vietnam’s prices are still $613-648/tonnes higher than previously.
The Food and Agriculture Organisation FAO said that the total rice output is 445.3mil tonnes for the 2008-2009 crop, an increase of 2.3% over the previous crop, while consumption is expected to reach 444.9 mil tonnes, an increase of 1.8% over the previous crop.
According to the Ministry of Industry and Trade, despite the profuse supply, the rice price will still increase slightly due to higher rice production costs and steadily high export prices.
VNN
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