VFA sets floor price for rice exports

VFA sets floor price for rice exports

The Viet Nam Food Association (VFA) has announced new floor prices for rice exports that will take effect on February 6.

The minimum export price for five per cent broken rice will go up to US$410 per tonne from the current prices of about $390 per tonne, while 35 per cent broken rice will be exported at no less than $365 per tonne.

The fixing of floor prices is to encourage rice exporters not to set lower prices since the prices of Vietnamese rice was now $30-40 lower than that of Pakistan and Indian rice, the association said.

The VFA has called on rice exporters to strictly adhere to floor prices, adding that they can decide on their own prices for other varieties.

In January, rice export fell in both volume and value over last year, the association said.

Exporters shipped 404,095 tonnes for a free-on-board (FOB) value of $183.4 million, a reduction of 35.68 per cent in volume and 36.94 per cent in value over December in 2012.

The average FOB price during the period was $453.95 per tonne.

VFA chairman Truong Thanh Phong said rice prices at the end of last month fell by $20-30 per tonne compared to the end of December due to low demand in the world market and stiff competition among rice exporters.

In January, VFA members signed contracts to export 1.24 million tonnes of rice, and delivery of 637,000 tonnes have to be made this year on contracts signed last year.

This meant another 1.4 million tonnes of the grain (in addition to the 404,095 already sent in January) have to be shipped in the first quarter, he said.

Currently, VFA member companies are buying rice under a plan to buy one million tonnes from the winter-spring crop to support farmers, Phong said.

Paddy purchase prices have risen slightly to VND5,400-5,500 for a kilogramme, he said, adding that this was good for farmers.

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