Vietnamese rice exporters are facing difficulties in fulfilling their target of selling 8 million tonnes of rice abroad this year as demand is waning while supply is increasing, warned Truong Thanh Phong, President of the Vietnam Food Association (VFA).

Phong was speaking at a VFA meeting in Ho Chi Minh City on April 4 to review the association’s export status in the first quarter and the results of its plan to stockpile one million tonnes of rice earlier this year.

He said in the current condition, VFA’s management must be more careful than ever.

According to VFA, as of March 31, the country registered a total contracted amount of 3.576 million tonnes, up 12.42 percent over the same period last year. In Q1, 1.451 million tonnes of rice were shipped abroad at an average price of 442.06 USD per tonne.

VFA said the primary reason why such a large volume of rice was exported at a low price was because exporters had to sell their rice to China at a reduced rate due to declining demand from other traditional markets.

In the first quarter only, China - the largest consumer of Vietnamese rice, signed contracts to purchase over one million tonnes of rice. It has so far received 630,000 tonnes.

Meanwhile, falling demand was seen in Africa - Vietnam’s second largest market, with only 500,000 tonnes signed in the first quarter this year.

However, Phong said in the next two months exporters will no longer suffer from buying pressure and can focus on selling.

In the second quarter, the country’s total rice export volume is estimated to reach 2.2 million tonnes, while exporters are expected to win additional contracts from concentrated markets, said Phong.

He affirmed VFA’s determination to export 8 million tonnes of rice in 2013, and called on businesses to keep a close eye on market developments, both imports and exports, and especially in Thailand and China.

During VFA’s April 4 meeting, the association reported that they reached their one-million-tonne target of rice stockpiles on March 31.

Rice traders stressed the necessity of buying rice to stock and suggested that in the context of a big rice harvest, the association should implement its buying plan to stabilise the market price and ensure a good price for farmers.-VNA