Bright outlook for rice exporters later this year

CAN THO – The prospect of the Vietnamese rice export sector later this year is forecast to be bright given the nation’s recent successful bids for supplying rice for Indonesia and the Philippines.

The prospect of the Vietnamese rice export sector later this year is forecast to be bright - Photo: Trung Chanh

Pham Thai Binh, director of Trung An Hi-tech Farming JSC in the Mekong Delta city of Can Tho, told the Daily that Trung An, together with other local companies, has bid to export rice to South Korea.

Rice exporters in China and Australia are also participating in the Korean tender, Binh said. Korea invited tenders for supply of 70,000 tons of Japonica rice, and tender results are expected to come out on May 9.

Rice must have been shipped to the Northeast Asian nation by June 30.

Meanwhile, the Philippines’ National Food Authority (NFA) has recently announced a plan to import 250,000 tons of rice under government-to-private (G2P) contracts from major rice exporting countries. This contract will be put up for tender on May 22.

Philippine President Rodrigo Duterte earlier said his country needs to import 500,000 tons of rice in an urgent manner.

The NFA last Friday held a successful government-to-government tender to purchase 250,000 tons of rice from Vietnam and Thailand. Vietnam secured a deal to supply 130,000 tons.

Though the Vietnam Food Association has yet to announce whether local rice companies would join in the upcoming tender of the Philippines or not, some rice traders predicted that Vietnam would not miss this opportunity.

The director of Trung An forecast the prospect of exporting more rice in the near future is good given the recent positive signs.

Lam Anh Tuan, director of Thinh Phat Co Ltd in the Mekong Delta province of Ben Tre, told the Daily before last Friday’s tender that if Vietnam won a deal to supply rice for the Philippines at a good price, this would create favorable conditions for the country to export rice in the rest of the year.

In fact, Vietnam last Friday offered its respective bids of US$526.5 and US$517.5 a ton for 15% and 25% broken rice. They were US$3.5 a ton lower than in the failed tender on April 27.

The US$3.5 reduction was not sharp. If prices of finished rice, the exchange rate between the U.S. dollar and the Vietnamese dong, and other relevant costs are taken into account, Vietnam’s offered prices were still high.

Earlier, the Southeast Asian nation won a deal to ship 300,000 tons of rice to Indonesia in late March, bringing the total to 441,000 tons so far this year.

The respective prices for a kilo of fresh and dried low-grade paddy IR 50404 are now VND5,500-5,700 and VND8,400-8,500, according to rice traders at the Ba Dac Wholesale Food Market in the Mekong Delta province of Tien Giang.

Meanwhile, fragrant rice varieties are sold at VND11,000-12,000 a kilo for finished products, and VND6,000-6,400 for fresh equivalents.

A new report by the Ministry of Agriculture and Rural Development shows that as of late April, Vietnam had exported 2.16 million tons of rice worth around US$1.1 billion, up 21.7% and 37.7% respectively from a year earlier.

China had remained the largest buyer of Vietnamese rice in the year to March, followed by Indonesia and Malaysia.