Optimistic outlook forecast for rice exports in Q4 of 2018: report

12-Sep-2018 Intellasia | The Saigon Times | 6:00 AM Print This Post

Vietnam’s rice export prospects in the fourth quarter of this year are forecast to be bright after a four-month decline triggered by low demand, according to news website Vietnamplus.

Rice export stagnation

According to a report by the Ministry of Agriculture and Rural Development, the country exported some 441,000 tonnes of rice, worth $209 million, last month, taking the total in the January-August period to 4.4 million tonnes, worth $2.2 billion, up by 6.8 percent in volume and 22.1 percent in value year-on-year.

The average rice export price between January and July was $507 per tonne, up by 14.8 percent against the year-ago period.

Overall, rice exports in the first eight months of the year maintained their growth tempo compared with the same period last year. However, the demand for Vietnamese rice among key importers, such as the Philippines, Indonesia and China, was low in the second and third quarters.

According to a rice-export company in the Mekong Delta region, Thailand has sold its 5 percent broken rice for $390 per tonne, the same price as that of the Vietnamese rice, resulting in fierce competition for Vietnamese exporters.

Nguyen Van Don, director of Viet Hung Co., Ltd, in Tien Giang Province, said the rice market remains gloomy. The company signed weekly contracts to supply some 1,000 tonnes of rice over the last few months and is unlikely to achieve its target for this year.

The large volume of rice sold in the first five months of the year cannot offset the company’s decline in rice exports in recent months.

China has imposed a 50 percent import duty on rice since early July, greatly affecting Vietnam’s rice exports, especially sticky rice. Vietnamese exporters are now selling sticky rice to Chinese partners at $380 per tonne, well below the selling price of $530-540 earlier this year.

The ministry report also showed that even though China remained the largest importer of Vietnamese rice until July, its market share plunged to 24.7 percent from more than 40 percent in the same period last year.

Between January and July, Vietnam exported 917,000 tonnes of rice, valued at $491 million, to its northern neighbour, plummeting by 32.8 percent in volume and 21.2 percent in value year-on-year.

Upbeat outlook in Q4

China, the Philippines, Indonesia, Iraq and the African countries are expected to have high demand for Vietnamese rice in the fourth quarter of the year. The Philippines will buy an additional 500,000-800,000 tonnes of rice to strengthen its reserves and stabilise its local rice price.

Chinese enterprises have also worked with rice exporters in the Mekong Delta region to seek cooperation opportunities in rice trade. Moreover, Indonesia and African countries will have higher demand for rice in the remaining months of the year due to an output decline triggered by storms and floods.

Meanwhile, the government has approved Decree 107/2018 with many preferential policies for rice exporters.

To reduce their dependence on the Chinese market, domestic exporters are trying to find solutions to strengthen sticky rice exports to Indonesia, thereby raising the product price to $440 per tonne from $400 per tonne in the last two months.

Nonetheless, the rice sector faces numerous challenges. The price of Vietnamese rice is often equal to or higher than the rice price of its competitors, according to Lam Anh Tuan, director of Thinh Phat Food Co., Ltd, in Ben Tre Province, adding that the relevant agencies should stay prudent while negotiating.

https://english.thesaigontimes.vn/62530/optimistic-outlook-forecast-for-rice-exports-in-q4-of-2018-report.html

 


Category: Economy, Vietnam

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