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Monday, June 17, 2024

Rice traders incur losses despite export surge

By Trung Chanh

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CANTHO – Rice traders reported losses even though their export volume and value last month doubled the figures of the same period last year.

Vietnam shipped around 1.1 million tons of rice abroad in April, up 14.4% against March and 98.1% against the same period last year, according to the Ministry of Agriculture and Rural Development.

Rice exports brought in US$574 million in the month, increasing by 12.8% compared to March and 108.1% against last April.

The country had shipped 2.95 million tons of rice abroad for US$1.55 billion in the year to April, surging 43.6% year-on-year in volume and 54.5% in value. The average rice price in the period also rose 7.6% year-on-year to US$526 per ton.

However, many rice exporters made lower profit, while some racked up losses, largely owing to high lending rates and domestic prices rising faster than export prices, according to their first-quarter consolidated financial statements.

Trung An High-Tech Farming JSC posted VND8.5 billion in net profit in the first quarter, down by VND18.6 billion over the same period last year. Loc Troi Group and Vietnam Southern Food Corporation lost VND81.2 billion and VND7.1 billion, respectively.

The general directors of the said companies attributed the steep decline in profit to high lending rates at banks.

Nguyen Van Thanh, chairman of Phuoc Thanh IV Trading – Production Company, told The Saigon Times that the losses were caused by rising domestic rice prices.

Traders had signed export contracts before shipping rice to their clients. As they did not have enough stock, they fulfilled their orders by buying rice from domestic merchants. However, domestic rice prices have soared by around 12-15% recently, making input prices higher than export prices, hence the losses, Thanh explained.

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