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New rice export contracts halted
Members of the Viet Nam Food Association (VFA) have been warned not to enter into addtional rice export contracts this year due to dwindling stockpiles.
The nation's rice exports totalled nearly 5.6 million tonnes in the first 10 months of the year, earning US$2.35 billion, according to VFA vice chairman Pham Van Bay.
Rice exporters were well on their way to reaching the year's target of 6.5 million tonnes for the entire year, Bay said.
They have also already signed contracts to export up to 6.8 million tonnes of rice this year but had only 1.1 million tonnes stockpiled in reserve as of October 15.
To slow the pace of exports, the VFA has increased the floor export rice price four times in the past two months, to $445 per tonne for 25-per-cent broken rice and $475 per tonne for 5-per-cent broken rice – $75 per tonne higher than rice prices in July 2010.
Pham Quang Dieu, an economist with the Viet Nam Market Analysis and Forecasts Joint Stock Co, called these price levels suitable in light of falling in a number of Asian countries (including leading rice exporter Thailand) and growing demand in markets from the US to Indonesia, Bangladesh and the Philippines.
He agreed that Viet Nam's rice reserves and anticipated yields were insufficient to meet higher demand.
Deputy Minister of Agriculture and Rural Development Diep Kinh Tan said the nation would harvest 40 million tonnes of rice in 2010.
"Without major changes in weather conditions, Viet Nam should be able to export an additional 1 million tonnes of rice before the end of the year while ensuring domestic food safety," said Tan.
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