Last update 12/23/2011 10:14:00 AM (GMT+7)

Vietnam may surpass Thailand to become biggest rice exporter in 2012

VietNamNet Bridge – Experts say Vietnam has every reason to believe that it may replace Thailand as the biggest rice exporter in the world in 2012.

With the overly high export prices, Thai rice exporters are worried that the rice export volume of the country would fall by a half in 2012. If this occurs, the position of the Number One rice exporter would be transferred to Vietnam.

According to the Thai Rice Exporters’ Association, by early December 2011, the country had exported 10.3 million tons of rice, an increase of 29.94 percent over the previous year. However, what worries them most is that the export has been slowing down recently.

This has been attributed to the recent big floods which affected 70 percent of the storehouses and processing workshops in the country. Especially, a lot of processing factories still have not resumed their production after the floods had gone down. They said that they need to wait two or three more months to see the workshops’ ground returning to the normal conditions.

However, the biggest reason behind the sharp decrease of the rice export volume in 2011 is the uncompetitive price. With the new policy applied by the Thai government which commits to buy rice from Thai farmers at high prices, the Thai export price is much higher than the prices offered by Thai rivals such as Vietnam and India.

In early December 2011, five percent broken rice of Thailand was offered at 595 dollars per ton, while the same kind of rice was offered by Indian exporters at 450-470 dollars per ton only.

Korbsook Iamsuri, Chair of the Thai Rice Exporters’ Association, said that in 2012, Thai rice export volume may drop to 7-7.5 million tons. Meanwhile, Thai rice exporters seem to be more pessimistic about the export volume in 2012, saying that if there is no big change in the policy, Thailand would export only five million tons in 2012.

However, at present, Vietnam is also facing big challenges because it has to compete with low priced rice from India and Pakistan. It is clear that Vietnam cannot find the way to get in the markets which pay more attention to the prices than to the quality, such as Africa.

However, analysts have pointed out that Vietnam’s rice can find its opportunities at higher grade markets. Vietnam’s rice has the higher quality than that of India and Pakistan, while it sells newly harvested rice (while Indian sell inventory rice), therefore, Vietnam would find its position in some certain markets.

Previously, Vietnam always had to compete fiercely with Thailand in the high grade markets. However, nowadays, when Thai rice has become less competitive, Vietnam’s opportunities in the markets prove to be bigger.

This explains why in the last two weeks, Vietnam continuously signed new contracts with foreign partners on exporting 600,000 tons of rice in total to Indonesia and Malaysia at good prices.

Experts believe that Vietnamese rice exporters may meet difficulties in the first months of 2012. However, with the food shortage predicted for the world market in 2012, Vietnam would still be able to export 7 million tons of rice in the year. And if the fear of Thai rice exporters turns realistic, Vietnam can hope to become the biggest exporter in the world.

In related news, the rice price has been decreasing sharply in the Mekong Delta market. According to the Vietnam Food Association, by the end of the last week the normal dry rice price hovered around 6050-6150 dong per kilo, a decrease of 950 dong per kilo from December 1, while the price of long grain rice has dropped by 850 dong per kilo to 6250 dong.

Especially, the first class rice which makes five percent broken rice is now traded at 8200 dong per kilo, down by 1150 dong.

Dai Doan Ket