Rice prices rise as drought continues

Pham Thanh Tho, a rice merchant at Ba Dac wholesale market in Tien Giang province, said on March 19 that fresh IR 50404 is now priced at VND5,000 per kilo, higher by VND350 per kilo than five days before, while IR 50404 material rice is being traded at VND7,100 per kilo.

Rice prices rise as drought continues

Tho said the price has soared because of strong demand and short supply.

“The demand is very high. A big volume of rice is carried to the north,” he said.

Nguyen Dinh Bich, a rice analysis expert, said the demand from China is very high. The US Department of Agriculture (USDA) predicted that China would import 5 tons of rice this year. 

“They (China) know the drought is occurring in Mekong River Delta and they have boosted purchases,” Bich said.

Huynh The Nang, chair of the Vietnam Food Association (VFA) and CEO of Vinafood 2, the Vietnamese biggest rice export corporation, said Vietnam had signed contracts on

exporting 2.248 million tons by the end of February, up by 63.25 percent compared to the last year’s same period. This includes the contracted 1.12 million tons carried forward from 2015.

As Vietnam has delivered 856,000 tons, it would still have to deliver 1.392 million tons from March, an increase of 46 percent compared with the same period last year. This includes 365,000 tons for government-to-government contracts and 1.027 million tons for commercial contracts.

Meanwhile, the supply is getting short because of the serious drought and saline intrusion in Mekong River Delta, the rice granary of Vietnam.

The supply is getting short because of the serious drought and saline intrusion in Mekong River Delta, the rice granary of Vietnam.

Le Thanh Tung from the Ministry of Agriculture and Rural Development (MARD) told the press on March 18 that the rice output in Mekong Delta in the 2015-2016 winter-spring crop may decrease by 300,000 tons compared to last year. Some other sources said the decrease may be up to 1 million tons.

Nguyen Thanh Phong, director of Van Loi Food Company in Tien Giang province, noted the domestic price has increased sharply in recent days because exporters need rice for both unofficial and official export.

“While export companies are collecting rice to fulfill the contracts they signed, a big volume of rice is being carried to the north (to be exported across the border gates to China),” he said.

Phong went on to say that rice merchants are collecting rice also because of the forecast that Indonesia and the Philippines would come back to buy rice. 

Meanwhile, MARD has predicted that 30 percent of the summer-autumn crop rice cannot be sowed as scheduled because of the drought.

“Those who have rice in hands will make fat profits,” Phong said.
 

Khoa Le

Source: Vietnam Net