China refuses Thai rice, bringing opportunities to Vietnam
China refuses Thai rice, bringing opportunities to Vietnam
China, has decided to cancel the contract on importing 1.2 million tons of rice from Thailand. Vietnamese hope they can be the alternative suppliers.
According to Bloomberg, China is one of the biggest Thai rice importers.
The Thai government has been buying rice at high prices from farmers in the subsidy program over the last two years. It now needs to sell the stockpile rice for money to pay farmers.
Thai farmers have threatened to organize anti-government demonstrations in many areas of Bangkok because they still have not got paid for the rice sold to the government.
However, the Chinese decision on canceling the import deal from Thailand would hinder the country’s plan to sell the stockpile.
While China’s imports from Thailand have decreased, the imports from Vietnam are on the rise.
According to Oryza, Vietnam’s rice prices have become the highest in Asia.
The figures released on December 20, 2013, showed that Vietnam’s 5 percent broken rice was traded at $410 per ton, representing the 20 percent decrease from two weeks before, but the 10 percent increase over the month before.
Meanwhile, Thai rice was traded at $380 per ton.
Do Van Hao from the Vietnam Institute for Agriculture and Rural Development Policies has confirmed that Vietnamese rice price has exceeded Thai rice.
Vietnam obtained a contract on selling 500,000 tons of rice to the Philippines on November 25 at the price of $462.5 per ton at the lowest. Meanwhile, Thailand’s rice was at $475 per ton. This was one of the reasons which led to the higher demand and higher price for Vietnam’s rice.
Vo Tong Xuan, the Vietnamese leading rice expert, noted that while Vietnam is exporting the rice it has just harvested, Thailand is selling the rice stored for a long time, which has led to the selling price differences.
The information about the cancelation of the 1.2 million ton rice import contract has made Vietnamese rice exporters leap for joy. However, experts keep cautious when talking about the opportunities.
“The fact that China has canceled the import deal will surely bring more opportunities to Vietnamese enterprises. However, they can only grab the opportunities if they can unite,” said Tran Dinh Long, an expert.
“Vietnamese rice products have different quality levels. Therefore, it is necessary to strengthen the post-harvest processing, prepare storehouses and only sell rice if it can go for good prices,” Long said.
He went on to say that farmers, represented by the associations, need to cooperate with each other, and that if Vietnamese enterprises try to compete by lowering the export prices, they would suffer.
It happened in the past that Vietnamese enterprises tried to scramble for clients by offering the prices lower than that offered by the rivals. As a result, Vietnam’s rice saw the prices drop dramatically in the world market.
The Vietnam Food Association (VFA) reportedly has instructed enterprises to build up the rice production chain in order to ensure high-quality product supplies, especially the fragrant rice with high value.
In 2013, Vietnam’s rice exports accounted for 32 percent of its total rice exports.
vietnamnet
