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Rice traders likely to halt exports
Domestic rice exporters said they might cancel contracts with foreign buyers if the export price was lower than the floor price to ensure their profit margins and that of farmers were maximised.
They have so far already signed contracts to export 6.8 million tonnes. Meanwhile, the rice export target this year was 6.5 million tonnes, said Nguyen Van Bay, Viet Nam Food Association (VFA) deputy chairman.
The floor price was US$445 per tonne for 25 per cent broken rice and $475 per tonne for 5 per cent broken rice, Bay said, adding that high world demand had forced the price up.
Rice topped exports in terms of value in the first 10 months of this year, the Ministry of Agriculture and Rural Development said. Exports grew year-on-year 4.9 per cent in volume to 5.66 million tonnes, and 9.24 per cent in value to $2.63 million.
Two million tonnes of rice were expected to be exported this quarter, the VFA said.
This year, the country expected to export 6 million to 6.5 million tonnes of rice. Exports next year were predicted to reach at least 6 million tonnes – depending on domestic supply and demand, the VFA said.
With yields of 5.3 tonnes per ha, Viet Nam ranked top in Southeast Asia in terms of productivity, said Bui Ba Bong, deputy minister of Agriculture and Rural Development.
Some major rice producing areas such as the Cuu Long (Mekong) Delta provinces of An Giang, Can Tho and Dong Thap reaped 7.3 tonnes per ha in the freshly harvested winter-spring crop, equivalent to world leaders such as Japan and South Korea.
National rice production this year was estimated at 39.9 million tonnes, with the southern provinces producing 23.5 million tonnes, said the Cultivation Department, attributing increased yields to improved farming techniques.
The Ministry of Agriculture and Rural Development has forecast that world prices could "possibly skyrocket" as Indonesia, which failed to reach a deal with Thailand, is likely to import an additional 200,000 tonnes of rice from Viet Nam. Meanwhile, Typhoon Megi wreaked havoc in northern Philippines and is expected to force the country to import between 500,000 tonnes and 600,000 tonnes of rice.
The situation might drive the world rice market into chaos, said economists.
In October, major rice exporters, including Viet Nam, Thailand, Pakistan and India, increased their export prices by at least 30 per cent over the previous month.
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