World rice price slump hits exporters
Rice bags are loaded onto a ship in the southern province of Dong Thap. The price of rice continued declining during the first quarter of this year, creating problems for rice exporters, despite an increase in rice export volumes. — VNA/VNS Photo Dinh Hue
HA NOI (VNS)— The price of rice continued declining during the first quarter of this year, creating problems for rice exporters despite an increase in rice export volume.
Rice prices were down 14 per cent against last year in the first quarter, while rice exports in the first three months grew by 34.3 per cent in volume. The result was a 5.7 per cent drop in export turnover to US$616 million, as prices fell to $450 per tonne.
According to Viet Nam Food Association chairman Truong Thanh Phong, the fall in prices due to abundant supplies.
India, for example, now has 35 million tonnes in stock while it only needs 14-15 million tonnes to ensure domestic food security.
Thailand is also capable of supplying 21 million tonnes to the world market in the next crop while its inventory is 14 million tonnes.
“Many enterprises have made heavy investments in an effort to obtain licences to export rice. But I think they should not invest more because demand is too low,” Phong told Viet Nam News.
Agricultural production is by its nature not stable. Therefore, prices will be adjusted following market movements, said the chairman.
He predicted that farmers’ earnings this year may be lower than 2012 given tough competition from Thailand.
India is now also offering rice at US$30 a tonne higher than that of Viet Nam, so it is difficult for Vietnamese firms to raise their prices, he added.
Last year, the nation had 144 rice exporters, with the 71 largest exporters accounting for 91 per cent of the country’s total rice export turnover, said Phong.
By the end of this month, Viet Nam had signed contracts to export 3.5 million tonnes and has already shipped 1.1 million tonnes, up 20 per cent and 12 per cent respectively on last year. — VNS