Thus, rice traders will not have to worry about finding consumption markets, he added.

The chairman made the statement after Vietnamese rice enterprises won contracts to supply 175,000 tons (MT) of rice to the Philippines through an open tender held by the country’s National Food Authority (NFA) on July 25.

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(Photo for illustration) 

According to the association, in the bidding for 2-percent broken rice export to the Philippines, four Vietnamese traders totaled 175,000 tons in the tender at different winning prices.

Specifically, Southern Food Corporation 2 (Vinafood 2) won a bid for 50,000 tons of rice at a Free on Board (FOB) price of USD 369.45 per ton; International Joint Stock Company won USD 50,000 tons for USD 357 to USD 367 per ton; Tan Long Group Joint Stock Company won 50,000 tons of rice for USD 354 to USD 359 per ton; and Hiep Loi Joint Stock Company hit 25,000 tons with the best price of USD 370.9 per ton.

This is the first time that private Vietnamese rice exporters have been allowed to participate in such a bidding, and they proved they could meet the strict requirements put forward by the Philippines.

“Four enterprises among the total eight businesses winning the bid is a clear demonstration of the capacity of the Vietnamese rice traders,” Nang said.

The chairman said that the winning contracts would partly help stabilize domestic rice prices soon.

In addition to the rice export contracts to the Philippines, domestic rice exporters are also preparing to deliver goods under the previously signed contracts to Cuba, Bangladesh and Malaysia.

“Therefore, from now until the end of the third quarter of 2017, the Vietnamese rice sector will not struggle to seek destinations for farmers’ products.”

According to VFA, demand for rice in Asia recently had positive impact on the rice exports of Vietnam this year.

There are several new emerging needs that motivate the market. For example, Bangladesh, after three rounds of bidding for 150,000 tons of rice and having bought 250,000 tons from Vietnam, is also negotiating 200,000 tons with Thailand and may continue to buy more from Vietnam.

Sri Lanka is also urgently importing 55,000 tons of rice from Pakistan and Myanmar, and seeking supplies from other countries, including Vietnam. Even the Philippines, in addition to the 250,000 tons bidding last week, may import more to shore up its stockpiles to ensure its food security. In addition to this, the consumption demand of China and India is expected to have an impact on the Vietnamese rice exports in the future.

However, whether the Vietnamese enterprises have access to these needs depends on their price competitiveness compared to the other export competitors, as well as the summer-autumn crop harvest in August and September.

Nguyen Thanh Long, managing director of Viet Rice Co., Ltd., said that if domestic rice prices "turn up" too high, Vietnamese rice exporters would find it hard to compete with foreign rivals while negotiating commercial contracts.

Currently, Vietnam’s rice export prices are equal or a little bit higher than those of Thailand. For example, Thailand’s 5-percent broken rice is being offered at USD 395 per ton, while that of Vietnam is USD 407 per ton, which will be profitable. If Vietnamese rice prices are not adjusted according to the Thai rice prices, it is difficult to attract customers and sign new contracts in the future.

According to the statistics of the Ministry of Agriculture and Rural Development, rice exports of the country in the first seven months of the year are estimated at 3.3 million tons, earning a revenue of USD 1.5 billion, up 15.7 percent in volume and 13.7 percent in value over the same period last year.

The rice export price in the first half of the year averaged USD 444.6 per ton, down 1.4 percent year-on-year.

Source: VNA