High price pushes back rice purchase tempo

photo: WN / Rubielyn Bunag

High price pushes back rice purchase tempo:

HCMC – High paddy prices in the Mekong Delta after the winter-spring harvest have pushed back traders’ rice purchase tempo, though exporters are getting closer to the delivery time.

Nguyen Van Thong, owner of the rice processing plant Hiep Trung Thong in Tien Giang Province, told the Daily rice trading since last week has slowed down considerably due to a sharp rise in paddy prices.

“Many exporters have declined to buy and waited for the price to drop,” he said.

In the Mekong Delta, unmilled rice price has increased to some VND6,200 a kilo, or some 30 U.S. cents, up 2 cents per kilo against two weeks ago.

Nguyen Thi Le Hang, director of a private enterprise named Phu Cuong in Can Tho City, told the Daily that she had to delay her planned purchase of 1,500 tons of 15%-broken rice for delivery to the Philippines due to the high prices.

“Prices of second-grade, milled rice of the 15%- and 25%-borken types are standing at above 38 U.S. cents per kilo. We can hardly make any profit from such a high price,” she said.

Hang is among a few private entrepreneurs allocated quotas from the Vietnam Food Association (VFA) to ship rice to Indonesia and the Philippines at the beginning of this month. Most of them are waiting for prices to drop before making purchases.

According to her, only State-owned rice exporters entrusted by VFA to purchase rice for stocking in early March can make a profit as they’ve purchased rice when prices were still low.

Harvest of the Mekong Delta’s winter-spring crop has come to an end, with the output rising an expected 5% to 10.4 million tons.

Recently, Vietnam has won bids for shipping 200,000 tons of low-grade rice to the Philippines as the world’s biggest importer. Nevertheless, many exporters would incur losses with the average selling price of US$480 per ton, if they don’t have enough rice in stockpile and have to buy materials at the current prices, said Pham Quang Dieu, chief economist of the market research firm Agromonitor.

Last week, Vietnam’s rice price for the first time has exceeded Thailand’s price for the high-grade 5% broken rice, at between US$480 and US$490 per ton for the former compared to between US$475 and US$480 per ton for the latter. The uptrend has continued this week when the export rice price, free on board, gained an additional US$10 per ton.

According to Dieu of Agromonitor, the rise in Vietnam rice price against Thai prices has made it more difficult for local exporters to attract Philippine buyers in the coming time when the Philippines’s food administrative body NFA opens bids for importing an additional 187,000 tons of rice.

According to VFA, the country has so far exported 2.1 million tons of rice valued at more than US$1 billion.


The Saigon Times
Thursday, April 21,2011,20:41 (GMT+7)