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Rice importers returning to explore the prices
After the Tet holiday, foreign rice importers have returned to Vietnam, but not to sign contracts. They just try to explore the situation.
Le Truong Son, General Director of Docimexco in Dong Thap province, said that it is very difficult to get export contracts at this moment. Rice importers have returned, but they just want to explore the prices and they intend to wait until Vietnam enters the high winter-spring crop harvesting season. This is the biggest rice crop of the year in Vietnam, slated for late February and early March.
Pham Quang Dieu, a rice expert of Agromonitor, a farm produce market analysis firm, also said that the market is now quiet with no transaction reported. Both sellers and buyers are trying to explore the situation and keeping waiting until the new happenings.
Vietnam’s and Thailand’s rice products are still higher than Indian rice price, which is also a reason behind the market’s quietness.
A source from VFA said it’s nearly impossible to sell more rice to Indonesia which has enough rice. Meanwhile, Bangladesh has shifted to buy rice from India. As such, Vietnam has lost the two important markets.
A rice export company in HCM City said that foreign importers have been trying to force the prices down. Some of them pay the prices which are even lower than the floor prices set up by the Vietnam Food Association VFA which took effect on January 18, 2012.
The FOB floor prices are 450 dollars per ton for five percent broken rice, 445 dollars per ton for 10 percent broken rice, 435 dollars for 15 percent broken rice and 425 dollars for 25 percent broken rice.
The newly set up floor prices represent the 45-50 dollar per ton decrease, or 10 percent, in comparison with the floor prices applied from December 22, 2011. The adjustments have been made according to rice exporters and aim to attract big contracts of up to several hundreds of thousands of tons.
According to VFA, in the first quarter of 2012, businesses could only sign the contracts on exporting one million tons of rice (it was 1.8 million tons in 2011). Meanwhile, the delivery is extended to August instead of the first quarter. Therefore, the rice export volume in the first months of the year would be lower than that of the same period of the last year.
The association has set up the plan to export 6.5-7 million tons of rice in 2012. In 2011, Vietnam exported 7.1 million tons, reaping 3.5 billion dollars in turnover.
Indonesia, Vietnam’s biggest importer in 2011, which imported 1.9 million tons worth one billion dollars, earlier this week signed a memorandum of understanding on purchasing 100,000-200,000 tons of 5 percent broken rice annually from Myanmar after the country removed the ban on rice export.
The move made by Indonesia has been described as the effort to ease the reliance on the current big supply sources, including Vietnam and Thailand.
Myanmar’s government is collecting rice from farmers at high prices in order to encourage the cultivation and export.
In a recent statement, the Myanmar Rice Association said that the rice export volume of the country would be double to 1.5 million tons this year. Meanwhile, the export volume would increase to 2 million tons in 2013 and reach 3 million tons by 2015. Myanmar targets the importers from Africa, Indonesia and the Philippines.
Analysts have commented that the appearance of Myanmar on the world market should be seen as a threat to Vietnam and Thailand.
vietnamnet
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