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Rice export: Vietnam needs to wait or take actions to grab opportunities?
Thailand has been “holding out.” India and Pakistan has been actively negotiating with partners to boost exports. What should Vietnam do: Keeping waiting or taking actions to grab the opportunities?
The world and the domestic rice markets both have been fluctuating when big rice importers in the world have placed orders with Indian and Pakistani exporters instead of the Vietnamese, and Thai because Indian and Pakistani exporters offer lower prices.
Meanwhile, the plan by the Thai government to buy rice from farmers at high prices implemented since October 7 has been meeting a lot of difficulties due to the worst flood in the last 50 years. As a result, the world’s rice price has not increased as expected by other big rice exporters, including Vietnam.
Vietnam: keep waiting or “jump”?
Rice experts once predicted that the Thai government’s policy to intervene the domestic rice market would push the rice export price to 700-850 dollars per ton. However, the world market has not been performing this way, because Thailand is bearing the worst flood in the last 50 years. At present, the export prices offered by export countries are still lower by 100-250 dollars per ton than the expected level.
The export prices offered by Vietnam and Thailand are still at 570-580 dollars per ton and 600-610 dollars per ton, respectively.
The export resumption of India, the biggest rice producer in the world (but not the biggest exporter) has had big influences on the world market.
Vietnamese rice exporters are still wavering between keeping waiting for the better news to come from Thailand, or boosting exports in the stiff competition with India and Pakistan.
If Vietnamese exporters keep waiting, hoping that the export price would increase in the near future and decide not to sign contracts right now, they may miss the opportunities. Meanwhile, if they boost exports right now, they may regret later, if the export prices go up.
At a meeting held recently in HCM City, Nguyen Trung Kien, Deputy Chair of the Vietnam Food Association (VFA), admitted that though Vietnam’s export prices have big influences to the world market, it will not be able to say exactly about the price prospect until the end of November, by that time, Vietnamese exporters will be able to know exactly whether they should go ahead and sign export contracts.
However, when answering the questions at the regular meeting held by the Ministry of Industry and Trade on October 7, Deputy Chair of VFA Pham Van Bay said he believes the export prices would stay firmly at high levels.
Meanwhile, VFA has advised rice exporters to sign agreements with Indonesia and build up relationships with Malaysia on rice export. The association has also advised farmers to harvest the crop soon in order to have best sale prices.
Domestic prices stay firmly high
Contrary predictions about the market prospect make rice traders puzzled. Thanh Phong, Director of Van Loi 2, a rice husking and trade company in Tien Giang province said, at first he heard that the market would be gloomy in the next year, and then he was told that the rice price would go up. Therefore, he cannot do anything at this moment, except waiting and listening for the news.
Meanwhile, a lot of companies have decided to store rice, believing that the price would stay firmly high. “I strongly believe that the rice price would be stably high the next year, because Vietnam has signed the contracts on exporting 800-900,000 tons which will be delivered in the first months of 2012,” said Vo Thanh Son, a merchant at Ba Dac Market in Cai Be district of Tien Giang province.
Other merchants at the Ba Dac market have also affirmed that the rice price in the Mekong Delta has been staying high. Fresh IR 50404 rice can be sold at 6400-6500 dong per kilo in Dong Thap and An Giang provinces, while dried IR 50404 is traded at 7500 dong per kilo.
Meanwhile, merchants pay 7800 dong per kilo for long grain rice including OM 4218, OM 5451, OM 1490.
vietnamnet, TBKTSG
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