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Rising rice price for the end of 2009?
While the Vietnam Food Association (VFA) believes that rice prices will continue rising towards the end of 2009, economic analysts say that the price increase may not happen.
According to VFA, by the end of September 2009, Vietnam exported nearly 5 million tonnes of rice, reaping a record $2.018 billion. VFA Chairman Truong Thanh Phong stated that Vietnam’s rice is going for a good price, forecasting that the price would move up further in the latter months of 2009.
Nevertheless, signs in the world market do not show such bright prospects, according to Saigon Tiep Thi.
Economists believe that it is very likely that Thailand, the world’s biggest rice exporter, will push up rice exports from now through the end of the year. Such a move would make the global rice price plummet.
Thailand’s rice exports thus far for 2009 are reportedly lower by 200,000 tonnes per month. To fulfill their rice export target, the country will have to flood the world market with nearly 210,000 tonnes of rice per week, an increase of 21.7 percent over the same period of 2008.
The chairman of the Thai Rice Exporters’ Association has stated that the rice export volume of the country would be not just 8.5 million tonnes, but would reach 8.7 or even 9 million tonnes.
The Government of Thailand has also applied a new policy on rice export management. The Government will not be the main buyer of rice on the Thai market anymore. In other words, instead of regulating and limiting rice exports, the Government of Thailand now wants to boost exports.
Because of these two factors, the Chairman of the Thai Rice Exporter’s Association has predicted that, with good weather, Thai rice prices may drop to $380-400 per tonne by the end of the year due to the increasing supply.
Moreover, other rice exporters who have been encouraged by the prolonged rice fever, have been pushing up rice production, which has led to the increased rice export volume.
Myanmar, for example, increased their rice export volume from 31,000 tonnes in 2007 to 541,000 tonnes in 2008 and is targeting one million tonnes for 2009.
Similarly, Cambodia, which exported 500,000 tonnes in 2008, is planning to export 800,000 tonnes this year.
Additionally, while the supply increases, demand remains unchanged, leading to the prediction that rice stocks on the world market will increase by 10.3 million tonnes to 90.7 milion tonnes, a record high for the last six years.
The Philippines, a big rice importer in the last several years, has been stricken continuously by typhoons and is expected to reduce its rice imports by 400,000 tonnes from the previously projected 2.4 million tonnes.
VietNamNet, SGTT
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