Vietnamese companies are advised not to sign more rice export deals, as over 1.8 million tons of rice were shipped abroad in the first five months this year, according to Nguyen Dang Chi, Deputy Director of the Import-Export Department under the Ministry of Trade.
With the current rate of delivery, Vietnam will have exported 2.2 million tons of rice by the end of June 2007, while the Government previously decided to cap rice export volume at only 4.5 million tons this year.
In fact, the rice volume contracted for exports has nearly reached the targeted level.
The most important task now is to ensure smooth production to harvest stable yield, and try to obtain high productivity to fulfill the export plan, Chi said.
He added that although rice exporters still have quotas for export, they should not sign more contracts at the moment, as the yield of the next crop remains uncertain.
Paddy cultivation depends heavily on the weather. Meanwhile, the rice export prices fluctuate while the domestic price now remains at a high level, equivalent to that of Thailand’s, making Vietnam’s rice less competitive.
Enterprises are not being guided in signing rice export contracts for the fourth quarter at this moment, but no one can know for sure rice prices and output at that time. The Government is cautious about rice exports; therefore, it will only consider adjusting the rice export goal in the third quarter of the year.
Worries have been expressed that halting signing export contracts may lead to decreasing rice price which will badly affect farmers.
The deputy director, however, eased the concerns by noting that farmers can sell paddy at VND2,750 per kilo right from their fields while production cost is VND1,450 per kilo.
Farmers can clearly make satisfactory profit at 80 per cent of the production cost, he said, adding that paddy price in the north soared by 12 per cent in the first five months of the year, while it rose by 22 per cent in the south, which means an average increase of 18 per cent.
The price increases have already brought profit of VND5,100 billion (US$318.75 million) to farmers.
Chi also forecast that rice prices will keep rising on both domestic and international markets for many reasons, such as narrowed paddy cultivation and higher rice demand fueled by population increase.
In some places, alcohol for use in engines is now generated from maize and cassava.
Experts have forecast that a big volume of maize and cassava will be consumed to generate alcohol, which will impact global food supplies. It is estimated that maize and cassava prices will increase by 10 per cent in 2007.
International food experts said at a conference in Thailand May 11-12 that the world’s price may increase by US$45-50 per ton. It is estimated that at the same time 1 billion people in the world are malnourished, and Vietnam should think of its food security.
Vietnam, the world’s second biggest rice exporter, reportedly exported 5.2 million tons of rice last year, grossing US$1.3 billion in revenue.
Traditional markets of Vietnamese rice are mostly in the Southeast Asia, the Middle East, and Africa. (
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