According to the Ministry of Industry and Trade, the demand for Vietnam 5 percent broken rice, has been rising, hitting USD 390 per ton in the early days of June, against USD 360 per ton to USD 380 per ton in late May.
Workers delivering rice bags at the Long An Food Company
This is the highest price since December 2014, the ministry said, attributing it to the rising global demand for rice imports, especially in the Asian region.
The export price rise has also caused the paddy price in the domestic market to soar. A ton of 5 percent broken rice in the domestic market stood between VND 7.65 million (USD 340) and VND 7.75 million in early June, up VND 550,000 (USD 24) per ton against last month.
The global rice market has been heating up after top importing countries, such as Bangladesh and the Philippines, announced to import roughly 950,000 tons of rice recently.
Bangladesh last month said it would buy 250,000 tons to 300,000 tons of Vietnamese rice immediately and planned to increase its rice imports from Vietnam to 500,000 tons by the end of 2017.
It will also buy one million tons of Vietnamese rice annually until 2022.
The Philippines also said that it would issue a tender late this month or July to import 250,000 tons of the grain from key suppliers Thailand, Vietnam and India.
Besides this, to meet the demand for rice until the year-end, as well as up to the first quarter of 2018, the Philippines is expected to import at least 1.5 million tons to 1.6 million tons of rice.
Other regional countries such as Malaysia and Indonesia have also planned to import rice, while the demand for rice in China and Africa is also on the upward trend.
While the demand for rice is rising, supply sources are restricted, even "being exhausted", international experts said.
At a rice conference in Bangkok, Thailand, on May 29, executive manager of Rice Trader Jeremy Zwinger said that the global sources of rice supply have been constricted. Even Thailand’s abundant stockpile of rice has fallen sharply.
In Thailand, in May, the rice stockpile was only 4.32 million tons.
In late May, Thailand floated tenders to sell 1.82 million tons of rice. Thailand’s ability to sell rice in the coming months will be severely limited, as the country’s paddy harvest, having an output of three million tons, is in September.
In Vietnam, the domestic stockpile is also restricted with most of the rice being exported to China. The country’s new paddy harvest season is in August.
The same trend is seen in India where rice exporters are facing the challenge of meeting their export contracts, until the next harvest season.
Experts have forecast that the global rice price will increase by roughly USD 20 per ton in the next three months.
They have advised rice exporting enterprises to not sell the crop in a hurry, hoping that the price of 5 percent broken rice would increase to at least USD 400 per ton.
Source: VNA