Vietnam should sell rice to the Philippines

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SaigonTimes English - 61 month(s) ago 6 readings

Vietnam should sell rice to the Philippines

While domestic rice prices have increased sharply, Vietnam is likely to win a contract to export 600,000 tons of rice to the Philippines. Local residents are so concerned about a rice price fever that the industry/trade authorities have to reassure them that the nation still has a large rice stock. The world rice market remains unpredictable with news about a rice shortage and with India expected to import three million tons next year. However, Nguyen Tho Tri, deputy general director of Southern Food Corporation (Vinafood 2), says it is necessary for Vietnam to export rice to the Philippines.

Vietnam should sell rice to the Philippines

Nguyen Tho Tri While domestic rice prices have increased sharply, Vietnam is likely to win a contract to export 600,000 tons of rice to the Philippines. Local residents are so concerned about a rice price fever that the industry/trade authorities have to reassure them that the nation still has a large rice stock. The world rice market remains unpredictable with news about a rice shortage and with India expected to import three million tons next year. However, Nguyen Tho Tri, deputy general director of Southern Food Corporation (Vinafood 2), says it is necessary for Vietnam to export rice to the Philippines.

The Saigon Times Daily: Vietnam has joined many bids to export rice to the Philippines in the last two months while local rice prices are soaring. Why does Vinafood 2 boost exports instead of stabilizing the local market?

- Nguyen Tho Tri: We are likely to win Tuesday’s bid under which Vietnam suggested to sell 600,000 tons of rice at US$664 per ton, US$15 higher than the bid we won a week ago. In two months, Vietnam has submitted four tenders to export 1.35 million tons while the Philippines’ total demand was 2.05 million tons. Vietnam has won two first bids to sell 450,000 tons. The Philippines has yet to announce results of the two later biddings, but related information shows that Vietnam has won the third tender for 300,000 tons and is likely to win the fourth one.

The nation has over one million tons of rice in stock and expects to stock three million tons more as local farmers will begin the autumn-spring harvest early next year. In former tenders, we bid to supply just half of the Philippines’ demand but we should bid for the total volume of the tender in the future given high export prices. If we win the Tuesday bid, Vietnam will export a total of 1.35 million tons to the Philippines, which is enough for the country to offload the current stockpile. In addition, the contracts require delivery next year.

Vietnam exported rice at only US$445 per ton during the first 11 months of this year while the price has soared to nearly US$650. Will the country incur losses if rice prices continue to surge?

- The world’s rice prices have increased against the middle of this year but it is not right to compare the two figures. Bidding prices include transport costs and deferred payment fees while commercial prices indicate free-on-board (FOB) prices.

In my opinion, it is hard for rice prices to increase next year. Besides bidding contracts to the Philippines, rice trading is rather quiet and local firms do not win many export contracts. India has no need to import rice in a hurry as the country just buys rice for reserve. India needs 12 million tons for reserve but has only seven million tons in stock. The nation seems to wait for the Philippines to complete buying and then announces bidding to reduce prices. Therefore, Vietnam should export rice to the Philippines given the good prices.

Reported by Hong Van

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