Rice shipments from Vietnam climbing on lower prices, China


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Rice shipments from Vietnam climbing on lower prices, China


Rice exports from Vietnam, the world’s third-largest shipper, will probably rebound this year as lower prices boost demand, while competition with Thailand keeps the gain to single digits, according to the government.
“The Chinese market will definitely become active again after quiet periods late 2014 and early this year,” said Tran Tuan Anh, deputy minister of industry and trade. Competitive prices, suitable varieties, and geographic proximity in particular to China, are Vietnam’s advantages over Thailand, the top shipper. Exports may rise “less than 10 percent” in 2015, he said in an interview in Hanoi on March 4.
Global output is set to be near last year’s record, and Thailand will ship more this year than any country ever, U.S. government data show. Futures fell to a four-year low in Chicago, helping cut food costs to the lowest since 2010. While Thailand’s export prices will be pressured as the country sells about 17 million metric tons in state reserves over the next two years, they have been higher than that of Vietnam, India and Pakistan, the Thai Rice Exporters Association says.
“While generally, Vietnamese rice costs less, Thailand does offer lower prices sometimes,” Anh said, without giving an estimate. Thailand is trying to increase access to Africa, where India and Pakistan also compete “fiercely,” he said.
Prices for Vietnam’s double-water-polished milled-rice with 5 percent broken were quoted at $355 per ton, the lowest since July 2010 and $50 less than Thailand’s 5 percent broken for the week ending Feb. 10, the U.S. Department of Agriculture said in a report dated Feb. 12.
Thai prices
The Thai variety was at $419 a ton on March 4, according to exporters association data. Chareon Laothamatas, president of the group, said on Feb. 3 that the price was about $405 to $410 and compares with $355 in Vietnam, $370 in Pakistan and $380 in India. The sale of stockpiled rice will continue to weigh on prices, Chareon said.
Thailand’s record stockpiles are the legacy of the previous government’s rice-purchase policy. Yingluck Shinawatra’s administration spent $27 billion buying at guaranteed, above-market rates to aid farmers. She was ousted in May by military leaders, who now plan to auction the grain.
Futures traded at $10.53 per 100 pounds on the Chicago Board of Trade on Tuesday after plunging to $10.01 on Feb. 3, the lowest since July 2010.
Vietnam sales
Exports from Vietnam dropped to 6.4 million tons in 2014 from 6.7 million a year earlier, General Statistics Office data show. Sales in the first two months of 2015 may reach 515,000 tons, down 34 percent from a year ago, the office estimates.
Shipments will pick up from the second quarter and bring the total this year to match or exceed last year’s figure by “a little bit,” Anh said, without giving exact figures.
Global milled production may decline to 474.6 million tons in 2014-15 from an all-time high of 477.1 million tons a year earlier, according to the USDA.
Thai shipments will climb to 11 million tons in 2015 from 10.2 million tons last year, according to the Food & Agriculture Organization. India will export 8.2 million tons from 10 million tons, it said. China’s imports may reach 4.3 million tons in 2014-15 from 4.1 million, the USDA report shows.
Vietnam will also continue to count on demand from its traditional markets like the Philippines, Malaysia, and Indonesia, Anh said. While the countries are trying to boost production and become self-sufficient, their efforts will take time and demand is still high this year, he said.

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