Local rice market staggering
By Trung Chanh - The Saigon Times Daily
CAN THO – With low-grade paddy prices at the nadir and high-quality paddy prices down slightly, the domestic rice market is staggering in line with global fluctuations.
While prices of the low-grade paddy IR 50404 remain stable at the bottom, fluctuating around VND3,950-4,150 a kilo, fragrant paddy categories have lost VND200-300 per kilo. In particular, fragrant and specialty paddies are priced at VND4,900-5,300 per kilo for the fresh type and VND5,700-6,200 a kilo for dried.
Le Van Tho, a rice intermediary trader in Tien Giang, said: “Low-quality paddy prices have already hit their nadir, which is enough to compete with the same products of India, the country with a regulatory role in the low-grade rice segment, so they cannot drop further.”
At Ba Dac Market in Cai Be District and the food trading area in Cai Lay District, Tien Giang, prices of material rice and finished rice IR 50404 remain stable at VND6,500-6,650 and VND7,500-7,700 a kilo respectively.
On the contrary, the finished white rice OM 4900 is priced at VND11,200-11,300 per kilo, dipping VND300-500 a kilo from last week.
Nguyen Phuc Anh, director of Tan Tai III Company in Ba Dac Market, said consumption of both low-grade and specialty rice in this market is very weak.
Meanwhile, rice exports are struggling with decline in both prices and export markets, especially after multiple export contracts signed with China were canceled by the foreign partner.
The Vietnam Food Association (VFA) said Vietnam’s rice exports have been rising in volume. Specifically, rice exports reached 790,000 tons last month, up 12% year-on-year, making May the month with the highest rice export volume since 2010 to date.
However, constant export price drops have greatly affected the profits of rice farmers and exporters. Particularly, the export price of the 5% broken rice has decreased by US$5-10 to US$410-415 per ton, while the 25% broken rice price has plunged to US$360-370 from US$380-390 a ton (FOB price at Saigon Port).
Pham Quang Dieu, director of the market analysis company Agromonitor, said Vietnam will face more difficulties due to the competitive pressure from cheap rice products of India as well as inventory release pressure of Thailand. He stated not only the rice industry but almost all sectors are falling into the same situation.