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Wednesday, July 24, 2024

VFA proposes rice export floor price to ensure stable supply

The Saigon Times

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HCMC – The Vietnam Food Association (VFA) has recently recommended introducing a floor price for the export of rice from Vietnam to safeguard stable supply amidst a significant surge in rice prices globally.

Since India imposed restrictions on white rice exports, world rice prices have substantially increased, causing extensive impact on global rice trade, local rice exporters, and rice prices, according to the VFA.

This situation arises from various factors such as domestic traders holding out for better offers, waiting for bullish trends, or facing challenges in securing adequate supplies for buyers.

In response to this current scenario, the VFA has issued an official directive urging its member businesses to prioritize the fulfillment of their existing contracts. This strategy is intended to bring stability to the market while collaborating with partners to extend delivery schedules, aiming to mitigate potential losses stemming from price volatility.

The VFA advises ensuring ample supply before entering into new contracts. To curb price fluctuations and potential disruptions in domestic markets, it recommends implementing purchase limits in the absence of a contract.

Notably, international rice buyers had been actively seeking to procure rice from Vietnam, even offering to pay an extra US$10-25 per ton compared to prices prior to India’s export restrictions.

Vietnam’s 5% and 25% broken rice are currently priced at a remarkable US$643 and US$628 per ton, respectively. These figures are US$10 and US$63 higher than Thailand’s levels.

As per the General Statistics Office, the total rice exports in the first eight months of the year reached six million tons valued at US$3.2 billion. August alone contributed nearly US$600 million to this total.

With an annual rice export volume ranging from seven to eight million tons, Vietnam is the world’s third largest rice exporting country behinid India and Thailand.

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