Rice in short supply, low competitiveness
Vietnam exported 583,294 tonnes of rice in March, realizing gross revenue of US$256.184 million (FOB), up 77.7% compared to February.
Roughly 1.219 million tonnes of rice were shipped in the first quarter of the year, fetching US$529.777 million (FOB), down 15.41% in volume and 16.9% in value against the same period last year.
According to the VFA, exports in March surpassed the set plan but accumulated three-month exports were much lower than the same period last year due to low inventories, limited supply, and a relatively high domestic price amid a declining world price.
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Apart from the Philippines, other Vietnamese rice consumers saw a sharp decline in volume compared to a year ago.
Although China accounted for more than 40% of Vietnam’s total export volume in the first quarter, it saw a 20% fall year on year.
Vietnamese rice shipped to Cuba and Africa also decreased over 51% and nearly 63% respectively in the reviewed period.
At a recent meeting on rice purchase and exports, the VFA said the export price of 5% broken rice was quite stable in January and early February at US$405-410 per tonne and then declined to US$390 per tonne in late March.
The fall was attributed to a low inventory level, short supply, and increased domestic rice prices, putting Vietnamese rice at a disadvantage on the world market.
Pressure from Thailand
The VFA predicts rice exports in April will face a number of challenges as Thailand is to resume rice exports, offering competitive prices.
Unconfirmed sources say Thailand plans to sell 200,000 tonnes of 5% broken rice to Malaysia’s leading rice processor Bernas at a highly competitive price of US$385 per tonne.
Meanwhile, the Philippines is tendering contracts for 800,000 tonnes of 15% broken rice on April 15 and both Vietnam and Thailand are expected to submit strong competitive bids.
To win Philippine bids, Vietnamese businesses will have to offer lower prices, while they have yet to predict pricing trends for shipments till August 2014.
Agricultural experts said that challenges lie ahead for the Vietnamese export market as the domestic price currently stands at very high level and is going to put pressure on export prices.
The VFA forecasts Vietnam will export 700,000 tonnes in April based on signed contracts.
The Ministry of Agriculture and Rural Development (MARD) said Mekong Delta provinces have begun harvesting the winter-spring rice crop.
133 businesses have purchased 349,267 tonnes of rice for stockpiling, meeting 34.93% of the plan. A MARD working mission will be dispatched to monitor rice purchase for reserves in the Mekong Delta region this month.