Vietnam Export Rice Prices Skyrocket

3:26:30 PM | 7/8/2005

Vietnam Export Rice Prices Skyrocket


The price of rice for exports from Vietnam, the world’s second largest rice exporter, in the international market has risen substantially in the first two months of this year, amid soaring rice exports, according to the country’s food association.


In the last two months, the price of Vietnam’s rice has remained steady at US$245 to US$260 per ton, up US$55 per ton from the same period last year, said Truong Thanh Phong, chairman of Vietnam Food Association (Vietfood), the country’s rice export managing body.


Rice prices will continue to stand at that height in the near future as demand is increasing. "The price won't fall because demand is very strong, and also because farmers are facing high production costs for fertiliser and gasoline,” Phong said.


Despite the start of the harvest season in the Mekong Delta region, high global demand continues to push prices of exportable rice higher in the local market. Most of Vietnam's rice for export is grown in the Mekong Delta region.


Paddy prices on February 15 were at around VND2,200-2,500 a kilo in the region, the highest level within 15 years, so local farmers can earn as much as VND1,200-1,500 a kilo. Mekong Delta region has so far this year cultivated around 1.5 million hectares of winter-spring rice crops with estimated output of 8.2 million tons, of which around 5 million tons of paddy rice for exports.


So far this year, Vietnam’s rice exports have hit 400,000 tons, up from 100,000 tons for the same period of 2003, the association said. Rice exporters have signed contracts to ship one million tons up to now.


This week, there are five vessels waiting in Saigon port to load a total of 63,900 tons of rice for shipment to Africa and the Philippines. One vessel left Saigon port last week carrying 6,000 tons of 25 per cent broken rice for the Philippines.


Phong said that Vietnamese businesses will bid for sales of 500,000 tons of rice to the Philippines, the world’s major importer of rice, on March 1.


Vietnam will boost its export of high-quality and glutinous rice, aiming to fulfill the target of exporting 3.8-4 million tons of rice worth US$1 billion this year. The country will raise the proportion of high-quality rice export to 45-50 per cent from the current level of 35 per cent. Vietnam will also expand markets for its glutinous rice, which is on greater world demand.


In 2004, the country with some 115,000 hectares of fragrant and glutinous rice, exported 100,000 tons of glutinous rice with prices of US$380-400, around US$100 higher than other ordinary rice.


Vietnam exported around four million tons of rice worth US$941 million in 2004. (VNS Feb 14, Thanh Nien News Online Feb 15, Youth Feb 15, Laborers Feb 15, Liberated Saigon Feb 15, Vietnam Economic Times Feb 16)