Local rice prices are expected to remain high from now to the end of this year due to strong demands of traditional and former customers of Thailand such as China and Africa.
Truong Thanh Phong, chairman of the Vietnam Food Association (VFA), said local enterprises had in the year to date delivered over 6.1 million tons of rice to foreign clients, the same as the year-ago period, but export value had dropped 9% on lower prices.
VFA after a recent meeting with rice exporters forecast that local enterprises could export a combined 7.5 million tons of rice this year but the value might decline 9%. Last year, the nation exported 7.1 million tons worth US$3.6 billon, Phong said.
The rice sector has experienced a host of difficulties since early this year with exports in the first quarter tumbling 45% against the same period of last year. However, VFA is pinning high hopes on higher prices and demands in early 2013.
Local firms have obtained enough export contracts for the fourth quarter and some deals for the first quarter of next year. If 7.5 million tons of rice is exported within 2012, there will be 800,000 tons set aside for next year.
Besides traditional markets, exporters have tapped some of Thailand’s former markets such as China and Africa. VFA member enterprises have contracted to ship 1.5 million tons of rice, mostly fragrance and high-grade types, to Africa, higher than in all of 2011.
High-grade rice accounted for 51% of the total export volume as of the end of September while the ratio was 28% in all of last year. The combined high-grade and fragrance rice volume accounted for up to 64%, Phong added.
In addition, Indonesia will import 600,000 to 750,000 tons of rice in the last quarter, taking to 1.0 million to 1.2 million tons the total volume this year. Vinafood 2 has recently struck a deal to sell 300,000 tons to Indonesia.
Concerning China, VFA members have secured contracts for 1.9 million tons. China has become the biggest rice importer of Vietnam this year, followed by Pakistan with 300,000 to 400,000 tons.
Small Chinese traders have gone to rice growing regions nationwide to buy rice on their own, prompting VFA to keep a close watch on the situation. VFA has also told Vinafood 1 to intervene in the market during between-crop periods to avoid a rice price upsurge.
Nevertheless, local exporters next year will have to face some competitors such as Thailand, India and Myanmar. Myanmar is deemed as a major rival in terms of low-grade rice as it sells 25% broken rice at only US$340 a ton.
The Saigon Times Daily