Vietnam expects higher prices for rice after Philippines bid
VietNamNet Bridge - The sale of 450,000 tons of rice to the Philippines under a government-to-government contract is expected to increase Vietnam’s rice price in domestic and world markets.

Vietnam, G2G contract, the Philippines, export turnover

Vietnam won the bid to provide 450,000 tons of 25 percent broken rice to the Philippines on September 17, but it has not influenced the domestic price. 

Experts believe, however, that it will help increase domestic consumption and maintain export prices.

Lam Anh Tuan, director of Thinh Phat Company, a member company of the Vietnam Food Association (VFA), said that Vietnam received a contract to sell rice to the Philippines at $426.6 per ton with deliveries at Philippine National Food Agency (NFA) storehouses. This means the FOB price at Vietnam’s ports is over $350 per ton.

Tuan believes this is a good price compared with the price of $315-325 per ton offered by Vietnamese businesses to foreign importers under commercial contracts.

He said the bidding price is even higher than the price of 5 percent broken rice exports, at $325-335 per ton. 

However, the domestic price remains low.

Nguyen Dinh Bich a renowned rice expert, believes the rice price in Mekong River Delta will move up but only very slightly, because Vietnam would have to deliver only 125,000 tons from now to the end of the year.

IR 50404 rice, which is used to process rice exports to the Philippines, is being sold at VND6,100 per kilo at the Ba Dac wholesale Market in Tien Giang province. The price has stayed unchanged since September 17.

Merchants are buying fresh IR 50404 from farmers in Tien Giang province at VND4,100 per kilo. The price has been stable since September 17.

However, Tuan of Thinh Phat is optimistic about what the bid with the Philippines can bring, saying this would help export prices stay firm. This would also help farmers sell the summer-spring inventory rice.

“As we have got the contract with the Philippines, foreign importers will have no reason to force the prices down,” Tuan said.

An analyst also noted that, with the contract with the Philippines, big stocks may have been lifted. Vietnamese farmers are preparing for the third crop of the year, but the output will not be large and it will be sold domestically. 

“I believe China will come back and buy Vietnam’s rice,” he said. “Chinese went away just to try to press the prices down. But as they have heard Vietnam can now sell rice, they will rush to come back.”

VFA member companies have sold 67,000 tons of rice this month.

TBKTSG

Vietnam, G2G contract, the Philippines, export turnover
 
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