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Vietnam protects rice export price
The Vietnam Food Association (VFA) has affirmed that exporters will not lower the rice export price, despite stockpiles of 1.6 million tons at present and possibly 2 million tons by the end of September.
By the end of August 2009, Vietnam had exported more than 4.5 million tons of rice at $408 per ton on average. The export price is the lowest level in the world, $100 lower than Thailand’s.
The number of signed rice export contracts thus far in 2009 has increased by 62 percent over the same period in 2008 (5,516,000 tons vs. 3,387,000 tons).
The price of rice
“Vietnam’s rice export price is decreasing because foreign partners have been trying to force the price down,” Deputy Chairman of VFA Nguyen Tho Tri explained.
He stated that Vietnamese exporters are doing harm to themselves by offering to sell rice at prices lower than the floor price (VFA sets floor prices at different times to keep export prices stable).
This has given foreign partners the “rod” to force prices down, Tri asserted, because they know about the large reserves in Vietnam.
Meanwhile, African countries, big markets for Vietnam’s rice, still have not purchased rice. With the global economic crisis, large countries that normally purchase rice for aid to Africa have yet to do so.
VFA pushes forward
Thailand, the world’s largest rice exporter, reportedly has rice stockpiles of 7,000 tons and is now preparing for the new crop. It is unclear if the Government of Thailand will sell rice in large quantities for many reasons, including political ones.
One rice exporter argued that Thailand, both in the past and in the present crisis period, always protects its rice prices.
Therefore Tri and other members of VFA believe that Vietnam’s rice still has a chance to do well on the world market. Tri predicted that opportunities may come as soon as the end of November 2009. By that time, Vietnam will likely obtain large export contracts.
“We have decided not to slash the export price,” Tri revealed. He believes that Vietnam should keep the export price stable in order to protect the value of Vietnam’s rice.
According to VFA, rice exporters purchased 500,000 tons already in the first collection campaign in August. Members of VFA will carry out the second collection campaign in September, with an estimated 500,000 more tons to be purchased at no less than 3,800 dong per kilo.
“We will have some 2 million tons in reserve. However, large stockpiles are not a concern, because they allow us to take the initiative in exporting,” said a member of VFA.
VietNamNet, LD
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