Rice prices rise thanks to exports of high-quality rice.
In the second week of July, summer-autumn rice prices in the Mekong Delta provinces rose again due to increasing demand from export businesses.
Good quality summer-autumn rice was purchased by traders at the fields on the weekend (July 14th) at 4,500 – 4,800 VND/kg, while dry rice was priced at 5,400 – 5,600 VND, an increase of about 300 – 400 VND compared to the beginning of July.
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According to businesses, the rice market is showing signs of warming up due to demand from importers. Mr. Truong Thanh Phong, chairman of the Vietnam Food Association (VFA), said that Chinese and African customers have returned to importing high-quality Vietnamese rice, as they cannot find better sources than Thailand – where prices are currently quite high. In addition, the export market for fragrant rice to Asian countries, especially...
“The export contracts for July and August no longer pose any concerns. It's likely that new demand will emerge in July, and combined with normal purchasing and exporting in the remaining months of the year, the plan to consume all 3.7 million tons of summer-autumn and autumn-winter rice will be achievable. However, rice prices are unlikely to fall, but they also won't rise as sharply as in previous years,” Mr. Phong analyzed.
As of July 14th, businesses had registered to export over 5.5 million tons of rice, an increase of more than 7%, of which 4.2 million tons had already been exported, worth $1.9 billion. According to the plan, in the last six months of the year, the amount of rice needed for consumption is approximately 5.3 million tons, including 1.6 million tons carried over from the winter-spring crop. The plan is to export about 4 million tons, with 1.3 million tons remaining in inventory for 2014.
The Vietnam Food Association (VFA) assesses that while neighboring Thailand has a policy of subsidizing rice prices, Vietnam must have a strategy to boost exports of high-quality rice to penetrate the segment where Thailand struggles to gain an advantage due to high prices. "In the first six months of this year, thanks to successfully penetrating the high-quality rice market in West Africa and China, domestic rice prices have remained stable and haven't fallen too sharply," commented the director of a rice export company.
Several businesses also confirmed that in recent days, the price of exported rice has increased by several tens of USD, fluctuating between 410 and 420 USD/ton compared to the beginning of the month, and there is an increasing trend of customers choosing to buy high-quality, fragrant rice.
Mr. Phong commented: "The weather is quite favorable for farmers to harvest the summer-autumn rice crop, thus significantly improving the quality of the rice. Businesses are actively buying for export, so in July and August, the peak harvest season (approximately 1.4 million hectares of summer-autumn rice), rice prices will remain stable and not decrease."
According to the Center for Industry and Trade Information (Ministry of Industry and Trade), Thailand plans to sell its rice reserves starting this week. They plan to sell up to 1.5 million tons of rice per month from now until the end of the year and will have to lower prices, accepting significant losses in order to sell the rice. This puts pressure on Vietnam's rice exports.
According to Baocongthuong-PH
