Rice price rising – to sell or not to sell?
VietNamNet Bridge – Vietnam, the second-biggest rice exporter in the world, is still wavering between two options, either boosting exports in the context of rising rice prices, or limiting exports to ensure food security and fight inflation.
Limiting exports to prevent domestic price increases?
The rice supply is expected to fall short this year and the rice price is forecast to hit the $1,000/tonne threshold. The current rice price is staying firm at the highest level since 1974, experts say.
A survey conducted by the World Food Programme (WFP) shows that by the end of 2007, 37 nations in the world had fallen into food crises, while 20 other countries had been imposing measures to control food prices.
The organisation said that it now needs some $600-700mil urgently to buy food for 89mil people in the world.
A lot of rice export countries in the world have decided to prohibit or limit rice exports in order to ensure domestic supplies and cool domestic markets down.
Most recently, the government of India decided to prohibit exporting non-basmati rice in an attempt to control the skyrocketing rice price on the domestic market. The export price of fragrant basmati soared to $1,200/tonne in order to limit exports.
Egypt on March 27 also announced it would prohibit rice exports from April to October 2008, when the country’s farmers harvest the new crop. Cambodia, a neighbour of Vietnam, has also released a decision on limiting rice exports. Everyday, a big volume of rice is being illegally exported through gates bordering Vietnam and Thailand.
China, the leading rice producer in the world, on one hand, has imposed a quota on rice exports and raised the rice export tax, and on the other hand, removed the import tax on food products, including rice. The country has, for the second time this year, raised the minimum rice purchase price in order to encourage farmers to produce more food and control inflation.
In Vietnam, the government has lowered the targeted rice exports for the first 10 months of the year to 3.5mil tonnes, which means that rice exports will decrease by 22% over the same period of last year.
The Ministry of Industry and Trade has assigned the Vietnam Food Association to regulate rice exports. Vietnam is expected to export 700-800,000 tonnes in the first quarter of the year, 1.3-1.5mil tonnes in second quarter, 1.3-1.4mil tonnes in the third quarter, and 700-800,000 tonnes in the fourth quarter.
Vietnam: exercise caution or take full advantage of price increases?
It is clear that the rice price increases in the world have created a golden opportunity for Vietnam, a big rice exporter, to increase export turnover. It is thought that rice exports of 800,000 tonnes could bring about $310mil in turnover. The export volume would increase by 20% only, but export turnover would increase by 61%.
Recently, in an interview with the press, Minister of Agriculture and Rural Development Cao Duc Phat said that there is no reason yet for adjusting the export plan. However, he said that the most important thing is to ensure food for people.
An official of the Ministry of Industry and Trade also said that it is necessary to reconsider the domestic consumption level and the targeted export volume. He said that it is necessary to think carefully if exports can help improve the living standards of farmers, who account for 75% of the total population, or they will affect 85mil people consuming food.
According to Associate Prof Dr Nguyen Tri Hoan, Deputy Head of the Institute for Food and Foodstuff Plants under the Vietnam Agriculture Science Institute, the total rice trading volume in the world is about 20mil tonnes, of which Vietnam alone provides 1/4-1/5.
Hoan said that with the current price of $750/tonne, the possible price of $1,000/tonne and 4-5mil tonnes of rice exports, Vietnam will earn a lot of money. However, he admitted that Vietnam cannot become rich with rice exports.
Prof Academic Dao The Tuan, former Chairman of the Scientific Association for Agriculture Development, said that Vietnam now seems to be returning to its rice monoculture, while giving up product diversification. Meanwhile, the prices of all other farm produce (corn, wheat and soybeans) are increasing sharply in the world.
International organisations have forecast that the world will seriously lack food in the 21st century. Should this be seen as an opportunity for Vietnam to develop agriculture?
Ha Yen
Limiting exports to prevent domestic price increases?
The rice supply is expected to fall short this year and the rice price is forecast to hit the $1,000/tonne threshold. The current rice price is staying firm at the highest level since 1974, experts say.
A survey conducted by the World Food Programme (WFP) shows that by the end of 2007, 37 nations in the world had fallen into food crises, while 20 other countries had been imposing measures to control food prices.
The organisation said that it now needs some $600-700mil urgently to buy food for 89mil people in the world.
A lot of rice export countries in the world have decided to prohibit or limit rice exports in order to ensure domestic supplies and cool domestic markets down.
Most recently, the government of India decided to prohibit exporting non-basmati rice in an attempt to control the skyrocketing rice price on the domestic market. The export price of fragrant basmati soared to $1,200/tonne in order to limit exports.
Egypt on March 27 also announced it would prohibit rice exports from April to October 2008, when the country’s farmers harvest the new crop. Cambodia, a neighbour of Vietnam, has also released a decision on limiting rice exports. Everyday, a big volume of rice is being illegally exported through gates bordering Vietnam and Thailand.
China, the leading rice producer in the world, on one hand, has imposed a quota on rice exports and raised the rice export tax, and on the other hand, removed the import tax on food products, including rice. The country has, for the second time this year, raised the minimum rice purchase price in order to encourage farmers to produce more food and control inflation.
In Vietnam, the government has lowered the targeted rice exports for the first 10 months of the year to 3.5mil tonnes, which means that rice exports will decrease by 22% over the same period of last year.
The Ministry of Industry and Trade has assigned the Vietnam Food Association to regulate rice exports. Vietnam is expected to export 700-800,000 tonnes in the first quarter of the year, 1.3-1.5mil tonnes in second quarter, 1.3-1.4mil tonnes in the third quarter, and 700-800,000 tonnes in the fourth quarter.
Vietnam: exercise caution or take full advantage of price increases?
It is clear that the rice price increases in the world have created a golden opportunity for Vietnam, a big rice exporter, to increase export turnover. It is thought that rice exports of 800,000 tonnes could bring about $310mil in turnover. The export volume would increase by 20% only, but export turnover would increase by 61%.
Recently, in an interview with the press, Minister of Agriculture and Rural Development Cao Duc Phat said that there is no reason yet for adjusting the export plan. However, he said that the most important thing is to ensure food for people.
An official of the Ministry of Industry and Trade also said that it is necessary to reconsider the domestic consumption level and the targeted export volume. He said that it is necessary to think carefully if exports can help improve the living standards of farmers, who account for 75% of the total population, or they will affect 85mil people consuming food.
According to Associate Prof Dr Nguyen Tri Hoan, Deputy Head of the Institute for Food and Foodstuff Plants under the Vietnam Agriculture Science Institute, the total rice trading volume in the world is about 20mil tonnes, of which Vietnam alone provides 1/4-1/5.
Hoan said that with the current price of $750/tonne, the possible price of $1,000/tonne and 4-5mil tonnes of rice exports, Vietnam will earn a lot of money. However, he admitted that Vietnam cannot become rich with rice exports.
Prof Academic Dao The Tuan, former Chairman of the Scientific Association for Agriculture Development, said that Vietnam now seems to be returning to its rice monoculture, while giving up product diversification. Meanwhile, the prices of all other farm produce (corn, wheat and soybeans) are increasing sharply in the world.
International organisations have forecast that the world will seriously lack food in the 21st century. Should this be seen as an opportunity for Vietnam to develop agriculture?
Ha Yen
1 comment:
Don't ponder! Just export it! You can always ask hun sen to pay with rice instead of rubber platations and land.
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