According to information from Reuters, price of 5% broken rice, FOB Saigon port of Vietnam last week rose to 405 USD/ton from the level of 390 – 400 USD/ton last week.
Some days ago, the Vietnam Food Association (VFA) said that the Prime Minister had already agreed the proposal to buy 1 million tons of rice in Winter-Spring 2012/2013 crop. As expected, the time to start buying for temporary program would be 20th February, after Lunar New Year holidays.
According to the newly issued Resolution from the regular meeting in January 2013, the government requested the Ministry of Agriculture and Rural Development to actively instruct for good execution of buying rice for temporary storage programto avoid declining price, affecting the income of farmers.
In Mekong River Delta areas, prices of some types of paddy and rice also increased gradually last week. Specifically, according to VFA, price of dried paddy in Mekong River Delta areas often fluctuated from 5,100 – 5,200 VND/kg, up by 100 VND/kg compared with last week; material rice to make 25% broken rice was 6,600 – 6,700 VND/kg, up by 50 VND/kg.
However, prices of some other types of rice leveled off or declined in the week. In which, price of long grain paddy was around 5,300 – 5,400 VND/kg, equal with the price in previous week. Price of material rice to make 5% broken rice was around 6,900 – 7,000 VND/kg subject to each area and quality.
Price of finished 5% broken rice at side without packing is currently around 7,800 – 7,900 VND/kg, down by 100 VND/kg; 15% broken rice is 7,400 – 7,500 VND/kg, equal with last week; and 25% broken rice is around 7,000 – 7,100 VND/kg, subject to quality and area, down by 100 VND.
VFA also said that in January, total rice exports of Vietnam reached 404,095 tons with FOB value of 183,437 million USD and CIF of 184,255 million USD.
On international market, Thailand rice exporters said that the government sooner or later would have to sell its huge temporary storage, and it would create downward pressure on rice price. However, last week, price of Thailand rice was still supported by the strong Bath.
Temporary paddy storage of Thailand government has recently reached 17 million tons of equivalent rice, a record high number. This amount is twice as much as normally annual exports of Thailand before starting the rice market intervention policy. Thailand authorities are currently facing difficulties in acquiring more space for rice and paddy storage.
"Sooner or later government will have to discharge a part of this rice storage. They are out of space for rice storage and also need to have money to maintain the market intervention policy”, Mr. Vichai Sriprasert, Honorary Chairman of Thailand rice exporters association said.
Many people said that, in case Thailand government decided to discharge the temporary rice storage, rice exports of Thailand this year would be much more than the number of 6.5 million tons that Thailand rice exporters association had predicted.
According to Mr. Vichai Sriprasert, Honorary Chairman of Thailand rice exporters association, if Thailand government could export some million tons of rice via governmental channels, rice exports of the country would reach 8 million tons.
In 2012, Thailand exported 6.9 million tons of rice, down sharply from 10.6 tons exported in 2011. The rice and paddy temporary storage program of Thailand government increased the price of rice significantly and made customers reluctant to buy, especially in the context that rice supplies from other countries such as India and Vietnam were plentiful.
The United States Department of Agriculture (USDA) predicted that in 2013, Thailand would export 8 million tons of rice. If the prediction came true, Thailand could regain the throne of the world’s largest rice exporter in 2013. In 2012, the throne of Thailand was usurped by India.
Also according to prediction of USDA, India would export 7.5 million tons of rice this year, down from 10.25 million tons in 2012. Vietnam was predicted to export 7.4 million tons of rice, from 7.7 million tons in 2012.
However, the competitive level among rice exporting countries are very high now. According to the traders, both Vietnam and India are reducing prices to attract buyers. Whereas, the Bath of Thailand is appreciating against the USD, creating more troubles for Thailand rice exporters.
From the beginning of the year, the Bath has appreciated 2.8% against the USD and become the highest appreciating currency in Asia. It was also the reason behind the sharp increase of indice of Thailand’s stock and bond exchange markets.
Therefore, the price of 5% broken white rice type of Thailand last week increased to 570 USD/ton from 565 USD/ton one week ago. The price of the same type of rice from India was only 405 USD/ton.
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