Golden Time to Export Rice

However, there is also a high possibility that Thailand and India will “open their barns” for export, which may lead to an oversupply of rice on global markets in the last months of the year. Hence, Vietnamese exportation may face difficulties.

 

Thailand and India, two major rice exporters, have stopped their rice export. This is a good chance for Vietnam to boost rice export, according to analyst Nguyen Dinh Bich from the Trade Research Institute. The government of Thailand is “puzzled” in regulating rice purchase and export while India is considering the exportation due to complicated climate conditions. These reasons are good conditions for Vietnam to export more rice while prices are on the rise.

 

Both India and Thailand are taking no action; Vietnam is a major player on global rice markets. By the end of June 2009, Vietnam exported 3.6 million tonnes of rice worth US$1.5 billion. Vietnam’s exported rice is hovering at US$400 per tonne in July. Local exporters have signed contracts for outward shipments of over 5 million tonnes of rice, facilitating large export volume in the context of excessive supply in the fall and winter. According to specialist Nguyen Trang Nhung of the Information Centre for Agricultural Development (Agroinfo), although the rice market was seen dull in the second quarter, the recovery happened in the last few days of the quarter with large-volume orders, delighting both exporters and farmers.

 

Technically, Vietnam should boost rice purchase and export at the moment because it lacks good storing facilities. It has completed harvesting the winter-spring crop and begun garnering the summer-autumn crop. According to experts, the rice in Vietnam is enough for domestic demand and export this year. Besides, on June 15, the Government decided to hike rice export, a move described to take advantage of good price and time.

 

In terms of supply, although Thailand and India have not made clear decisions for rice export, they are forecast to open their granaries soon. Recently, India has loosened non-fragrant rice policy while Thailand has prepared for export stockpiled rice estimated at 7 million tonnes, which are predicted to be larger in the coming time. If so, the supply sources will soar and Vietnam’s export will hence face difficulties.

 

Into the bargain, Indonesia, a traditional importer of Vietnamese rice, may export 2-3 million tonnes of rice this year. On the international rice market, Indonesia regularly shifted from importer to exporter and vice versa, creating unpredictable market movements. In 1998, this country caused a global rice fever as it imported more than 6 million tonnes of rice.

 

In 2009, the global rice growing area is estimated to be expanded by 2 per cent over 2008, the productivity is expected to rise 1.3 per cent and the output is hoped to increase 1.04 per cent. Together with higher the global output, the domestic harvest in summer-autumn and autumn-winter crops is also believed to lower the price in the near future.

 

Possibly, the rice price will be lower in the second half of 2009 than in the first half. Analyst Nguyen Dinh Bich advised rice traders to boost export, not keeping for higher prices. Based on rice trading histories, the rice price will decrease in the second half due to excessive supply.