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China demand drives rice prices upwards
Rice and paddy prices have risen over the last week in the Cuu Long (Mekong Delta), the nation's rice basket, based on what observers say is increased purchasing power in the Chinese market.
As of yesterday , paddy and rice were selling at prices VND100 to VND120 per kilogramme higher compared with last weekend.
In Can Tho City and the provinces of Hau Giang, Vinh Long, Soc Trang, Tra Vinh and Dong Thap, undried IR 50404 paddy sold for VND4,450 – 4,550 per kilogramme, and dried paddy for VND5,400 – 5,500 per kg.
Undried long-grain paddy was priced at VND4,600-4,800 per kg and dried paddy at VND5,800 – 6,000 per kg while undried high-quality paddy sold for VND6,600 – VND6,800 per kilogramme.
Ho Quang Thai, a farmer from Vinh Thuan Trung Commune in An Giang Province's Chau Phu District, said with these prices, local farmers can earn profits as high as the winter-spring crop of 2011.
The rice reserve purchase plan (beginning March 15) and strong demand for rice from China are the main reasons behind the paddy/rice price hikes over the past few days, market observes and industry insiders say.
An exporter in the Cuu Long (Mekong) Delta who declined to be named said many Chinese traders have come to the area seeking to purchase rice, adding that the price of rice exported to China were US$15 to 20 per tonne higher than last week. Le Truong Son, general director of Docimexco Dong Thap, said that the buying power of the Chinese market has gone up in recent days.
In March alone, Vietnamese firms have registered to export to China 450,000 tonnes of rice compared with just 200,000 tonnes in the first two months of the year.
Nguyen Van Man with Tien Giang-based private firm Len Hiep said his company has been supplying supplied the Tien Giang Province Food Company with 1,500 to 2,500 tonnes of rice per week for export to China.
Many small and medium enterprises in An Thanh Industrial Zone and the Ba Dac wholesale market in Tien Giang Province have also been delivering rice to firms in northern provinces for sale to China.
Truong Thanh Phong, Chairman of the Viet Nam Food Association (VFA), told Viet Nam News yesterday that in the first two weeks of March, Vietnamese firms have signed contracts to export some 260,000 tonnes of rice to China, bringing the total rice exports to the country through the official channels so far this year to some 500,000 tonnes.
He put rice exports to China via cross-border trade over the same period at over 400,000 tonnes.
An estimated one million tonnes of rice can be exported to China in the first three months of this year (through export contracts and cross-border trade) and the figure is expected to further increase in the last three quarters of 2012 as China's demand for (Vietnamese) rice is on the rice, said Phong.
He said VFA will send a delegation next week to southern provinces of China to seek cooperation opportunities with Chinese firms after the two sides agreed to set up a centre to promote the export of Vietnamese high-quality rice.
According to VFA figures, as of mid-March, Vietnamese firms had won contracts to export 2.4 million tonnes of rice, as high as the same period last year, and 800,000 tonnes have already been shipped to buyers. VFA said some one million tonnes of rice will be exported in the first quarter of 2012.
vietnamnews
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