It is forecasted that Vietnam's rice export could teach 4.5-4.6 million tonnes this year. But whether will the country reach the target while there are four months left?
Up to August 7, 2008, Vietnam exported nearly 2.76 million tonnes of rice, fob valued at over US$1.603 billion, and CIF valued at 1.743 billion dong. In July alone, Vietnam exported 405,226 tonnes of rice, fob valued at US$333.40 million and CIF valued at US$379.79 million. The figures represent a decrease of 1.7% in quantity and increase of 94% in value, according to the Vietnam Food Association.
Vietnam's main export markets are Asian countries, which consume 61.58% of exports, Africa (17.13%), America (14.73%) and other countries in the Middle East (4.2%) and Europe.
In June 2008, Cuba surpassed the Philippines to become the biggest rice export market for Vietnam, consuming 85,200 tonnes, worth US$102.6 million, representing a 27.9% increase in quantity and 48.1% in value compared to May 2008. In H1, the total exports to the market were 336,575 tonnes worth US$296.8 million.
Meanwhile, Vietnam's second-biggest market, the Philippines, saw a sharp decrease in imports, 61,542 million tonnes, worth US$58.3 million tonnes, down by 77.5% in quantity and 73.9% in value compared to May 2008. However, the total exports to the market in H1 were relatively big, at 1,101,806 million tonnes, worth US$633.6 million.
The rice exports to Angola also witnessed the sharp increase of 148.1% in quantity and 224.3% in value over the previous month, 25,600 tonnes, worth US$19.4 million. The exports to Russia in the month also increased to 8,097 tonnes, bringing the turnover of US$6.768 million.
Poland has never been a big export market for Vietnam, but it really saw a sharp increase in export turnover (+153.9% in quantity and +187.9% in value).
According to the Ministry of Industry and Trade, the world's prices are on the decrease due to the bountiful crops in big rice export countries like Vietnam, Thailand, Pakistan, while big import countries have bought volumes big enough to meet the demand.
Thailand's inventory volume has reached 2.57 million tonnes, up by 20% compared to the beginning of 2008. The country expects to harvest 7.6 million tonnes of paddies in August and September, up by 3.6 million tonnes from the four million tonne level in the same period last year.
Thailand's rice price has decreased by over 30% with the white rice price down to the floor price of US$700 a tonne. The country is conducting negotiations to sell 850,000 tonnes to Iran, 250,000 tonnes to Nigeria, and it will sell stocks after fulfilling transactions with the countries.
Sources say that Iran has tried to contact Vietnamese exporters, but no successful deal has been reported, as Iranian dealers are offering US$500 a tonne, too low for Vietnamese exporters.
Pakistan is optimistic about rice supplies, and it may export five million tonnes of rice.
According to the Ministry of Industry and Trade's Import-Export Department, importers are paying nearly US$500 per tonne fob for Vietnam's 5% broken rice. However, the importers still hope the prices will fall further, therefore, they do not hesitate to sign big contracts.
Meanwhile, the paddy price in the domestic market has been falling down. Farmers are harvesting a bountiful summer-autumn crop in Mekong River Delta. Good dried paddy is now selling at 4,400-4,500 dong per kilogram.
However, in many localities, paddy is now selling at 2,900-3,100 dong per kilogram only, while the production cost is 3,900 dong per kilogram. As farmers have to undersell paddy, the yield of the next crop will be influenced.
In order to boost rice exports, the government has decided not to collect export tax on rice exports at the price of less than US$800 a tonne.
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