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Vietnamese Rice Export Prices Near Thailand’s
12 | 07 | 2007
The gap between export prices of Vietnamese and Thai rice has been narrowed considerably, as local exporters have already sold 5 per cent broken rice at US$305 per ton for contracts signed in March of 2007, only US$3-5 lower than those by Thai firms.
In previous years, Thai rice was quoted US$30 per ton higher as compared to the same kind of Vietnamese rice, according to the Vietnam Food Association (Vietfood).
 
The Southeast Asian country has gotten used to being the second largest rice exporter in the world over the past decade, but it is mostly thanks to high export volume rather than export value.
 
In the 2001-2005 period, Vietnam sold 20 million tons of rice globally, gaining only US$4.5 billion. Experts said at least VND18,000 billion (US$1.12 billion) was lost during the period, because the country sold rice at cheap prices.
 
The selling price of Vietnamese rice previously stood around US$220 per ton, or 20 per cent lower than the global market average. It was also the cheapest price level among the world’s five leading rice exporters, including Thailand, India, the US, and Pakistan.
 
“It’s a good sign that the price is nearly equal to Thailand’s, which means the quality of Vietnamese rice has improved,” according to the chairman of Vietfood, Truong Thanh Phong.
 
Phong is optimistic about rice output and exports of Vietnam this year, saying export volume may reach 5 million tons this year.
 
The winter-spring crop yield has reportedly reached 9.2-9.3 million tons, exceeding the target. Moreover, prices remained high due to import demand from Asian countries, nations in West Africa and the Middle East, Phong explained.
 
Vietnamese enterprises have so far this year secured contracts to export 3.5 million tons of rice, three million tons of which will be shipped during the first half of this year, and the remaining 500,000 tons would be completed by September.
 
“Export prices so far this year have increased by $40 a ton, compared with last year,” Phong said.
 
January to March rice exports fell 43.3 per cent from a year earlier to 710,000 tons, following government restrictions on export contracts, and revenues fell 33.2 per cent to $229 million.
 
Vietnam, the world’s second-largest rice exporter after Thailand, initially lowered its grain shipment target for 2007 to four million tons, after pests damaged part of the crop last year.

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