|
Domestic rice prices climbing on back of export prices
Just within five days, the paddy prices in the Cuu Long River Delta’s provinces decreased by VND 100/kg. On March 25, dried OM 2514 paddy was sold at VND 4,450/kg, while the price dropped to VND 4,430/kg on March 28, and then to VND 4,330/kg on March 30.
Prices decreasing, why?
According to the Ministry of Agriculture and Rural Development (MARD), the average productivity of the winter-spring crop is between 6.2-6.3 ton per hectare. It is expected that the Cuu Long River Delta’s farmers will finish harvesting the crop by mid-April. The total rice output of the delta is expected to reach between 9.6-9.8 million tons, the same with the last year’s winter-spring crop.
However, the paddy prices have been decreasing continuously in the last few days. Nguyen Van Lac, a farmer in Long Phu Commune, Tan Chau district, said “I have just harvested 2.5 hectares of OM 2514 paddy, 7 hectares per hectare. On March 27, I witnessed Nguyen Van Hoa in the same commune selling OM 2514 at VND 4,430/kg. On March 29, I decided to sell my paddies, but merchants only paid VND 4,380 or VND 50/kg lower than two days ago. I found out the next morning that the price dropped further by VND 50/kg to VND 4,330/kg.”
According to Angimex, the Vietnam Food Association assigned the company to export 40,000 tons of rice under contracts, while the company has to find the outlets for other exports. The company has denied the lowering of the prices at which it purchases paddies, saying that in the last week, the company’s paddy purchase prices remain stable. The material rice for making between 15-25% of rice products is being purchased at between VND 5,700-5,750/kg, while the material rice for making 5% rice product at between VND 5,800-5,820/kg.
The representative of the company also said that Vietnam’s export rice is now going for a good price; therefore, he doesn’t think the winter-spring crop’s paddies will decrease in price. The representative said that the paddy prices on the market have been decreasing because petty merchants force the prices down, while export companies do not lower the purchase prices.
The representative said that it is now the highest peak of harvesting the winter-spring crop, while farmers want to sell their paddies soon to get money; therefore, merchants had the rod to force the prices down.
Rice prices will keep rising
According to the Ministry of Industry and Trade, in the first quarter of 2009, Vietnam exported 1.74 million tons of rice, up by 76% over the same period of the last year. Vietnam’s 5% broken rice is now exporting at between VND 435-460/ton FOB, while the 25% broken rice between US $400-410/tonne.
According to the Information Centre under the Ministry of Agriculture and Rural Development, after many weeks of witnessing the export prices increasing continuously, Vietnam’s rice export price this week has decreased. 5% broken rice price has decreased by US $22.00/ton, and 25% of broken rice down by US $5.00/ton to US $400/ton.
Meanwhile, the domestic paddy price is forecasted to increase since export companies are pushing up the rice collection to make deliveries of three million tons in June. The Prime Minister has asked the two biggest food corporations to purchase all the paddies from farmers, ensuring the 30% profit for farmers.
Huynh Minh Hue, Acting Secretary General of the Vietnam Food Association (VFA), said that Vietnam will have to export 600,000 tons a month in the next four months under signed contracts. With the high demand for rice to fulfill the deliveries, the paddy prices will not decrease.
The VFA said that the paddy price was VND 3,800/kg at the end of 2008, now has surged between VND 4,300-4,400/kg. The VFA believes that the rice prices would rise further, which will bring satisfactory profit to farmers.
In 2009, Vietnam plans to export between 4.5-5 million tons of rice, while the export volume in the first half of the year is three million tons.
VietNamNet, TBKTVN
|
