Rice exporters are making hay while the sun shines.
"The export prices will not change suddenly because the demand is not high this year” - Nguyen Van Bay Chairman of An Giang Agriculture and Foods
According to the Vietnam Food Association (VFA) to May 1, inked rice export deals had jumped 22 per cent compared to 2011’s corresponding period. Just two months ago, it was all doom and gloom as Vietnam’s rice exports only amounted to 627,000 tonnes, a 43 per cent drop compared to the same period in 2011.
However, favourable international markets have seen Vietnam’s export price of 5 per cent broken rice increased from $425 per tonne to $430-440 per tonne and 25 per cent broken rice increase from $370-380 per tonne to $400-410 per tonne.
“The spread between the inventory and future rice contracts is small,” said Nguyen Van Bay, chairman of An Giang Agriculture and Foods. Inventories, including reserve and article for sale, was at the biggest level so far. Rice kept by farmers and husk plants accounted only nearly 0.5 million tonne, added Bay. Local rice firms were continuing to focus on traditional markets and the VFA was targeting 6.5-7 million in rice exports in 2012, said Bay.
Vietnam, as well as Thailand and Cambodia, had also made offers to supply rice to the Philippines in May.
“The export prices will not change suddenly because the demand is not high this year,” said Bay.
Meanwhile, Thailand’s government has continuously bought rice from its farmers despite an inventory of over eight million tonnes. Moreover, there was a bumper crop in India, said Bay.
Vietnam exported 7.105 million tonnes of rice in 2011. In the first four months of 2012, Vietnam’s rice exports totaled 1.7 million tonnes, worth $820 million, according to the VFA.