VietNamNet Bridge – Vietnamese rice exporters have signed contracts to export 3.5mil tonnes so far this year, and they have been advised not to sign more contracts.
Major task: ensuring rice output
Nguyen Dang Chi, Deputy Director of the Import-Export Department under the Ministry of Trade, said that Vietnam had exported 1.8mil tonnes of rice so far this year. With the current rate of delivery, by the end of June 2007, Vietnam will have exported 2.2mil tonnes of rice, while the Government previously decided that rice exports would be 4.5mil tonnes this year.
In fact, the volume of export rice in the signed contracts has nearly reached the targeted level. The most important task now is to ensure smooth production to get stable output, and try to obtain high productivity to fulfill the export plan.
Though rice exporters still have quotas for export, they should not sign more contracts at this moment, as the yield of the next crop remains uncertain.
Paddy cultivation depends heavily on the weather. Meanwhile, the rice export price fluctuates and domestic prices now remain at high levels, equivalent to that of Thailand’s. This will make Vietnam’s rice less competitive.
Enterprises are not being guided in signing contracts on rice exports for the fourth quarter at this moment but no one can know for sure about the rice price and output at that time. The Government is keeping cautious about rice exports; therefore, it will only consider adjusting the rice export goal in the third quarter of the year.
Which prices?
If halting signing export contracts, the rice price will decrease, which will badly affect farmers. What does MoT say about this?
The paddy price in the north increased by 12% in the first five months of the year, while it rose by 22% in the south, which means an average increase of 18%.
The price increases have brought about the profit of VNDF5,100bil to farmers. If noting that the production cost is VND1,450/kg, and farmers can sell paddy at VND2,750/kg right in the field, it is clear that farmers can make the profit at 80% of the production cost, a satisfactory result.
The effectiveness of rice exports in the last few years proved to be not as high as expected. Should we maintain rice exports in the way like they have been carried out?
The rice price in both the domestic and international markets will keep rising for many reasons. First, the area for paddy cultivation in Vietnam has been narrowed due to industrialisation and urbanisation. Second, many farmers in the north have given up growing paddy due to low profit. Third, the population increase results in higher demand for rice, while the supply remains unchanged. Fourth, changeable weather, calamities always affect cultivation, thus affecting food prices. The fifth reason is a completely new issue. In the world, people now can generate alcohol from maize and cassava which can be used for engines.
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% right in 2007.
International food experts said at the conference in Thailand held on May 11-12 that the world’s price may increase by $45-50/tonne. It is estimated that 1bil people in the world will be ill-nourished, and Vietnam should think of its food safety.
(Source: Viet Nam Net) | 
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