Farmers in the Mekong Delta harvest winter-spring rice (Photo: VNA) HCM City (VNA) –The sudden surge in domestic rice prices in this year’s winter-spring crop hasmade a number of rice exporters suffer from losses in the first quarter.
Vietnam exported 1.28 million tonnes of riceworth nearly 570 million USD in the first three months of 2017, down 18.1percent in volume and 17.3 percent in value from a year earlier, according tothe Ministry of Agriculture and Rural Development.
Chairman of the Vietnam Food Association HuynhThe Nang said although rice shipments fell in Q1, it was still positivecompared to the previous years. Most of exported rice was destined for thePhilippines, China and Africa, which are also the biggest rice importer ofVietnam, helping to keep domestic prices high in the winter-spring crop.
Businesses said it was abnormal that domesticrice prices rose sharply in the crop’s harvest season. Most of the firms thatinked export contracts before the winter-winter crop have suffered from losses.
Lam Anh Tuan, Director of the Thinh PhatFoodstuffs Co. Ltd in the Mekong Delta province of Ben Tre, said businessesusually sign export contracts early so that when local rice prices decline inthe harvest season, they will buy rice from farmers.
However, the situation changed this year whenrice prices remained too high throughout the winter-spring crop, even higherthan export prices, causing the companies a loss on the deals they had inked,he added.
Many enterprises were unable to respond to thesudden price hike, failing to purchase and ship rice as scheduled. Some evenrefused to deliver goods as stated in contracts as they didn’t want to makelosses, said Do Ha Nam – General Director of the Vietnam Intimex Joint StockCorporation.
Soaring domestic prices also increased exportprices which have already been 10 – 15 USD per tonnes higher than those offeredby Thailand and India. As a result, it is hard for Vietnamese rice to competewith Thai or Indian goods in the same market segment.
Nguyen Van Don, Director of the Viet Hung Co.Ltd in the Mekong Delta province of Tien Giang, said his firm did not sign anyexport contracts from late February to March 20 to wait for market changes.
It is unlikely that importers would buyVietnamese rice whose prices are higher than those of Thailand and India.Meanwhile, the company would suffer from losses if it lowered prices whichcould not make up for purchase and delivery expenses, he elaborated.
Most of the surveyed businesses said the marketis still unpredictable, but there may be favourable conditions for overseasshipment in the third and fourth quarters when Thailand will have finishedselling its stockpiled rice.-VNA
VNA
