Affected by the 4th wave of Covid-19 epidemic, rice exports fell sharply. Vietnam’s export rice price has fallen to the lowest level in the past one and a half years.
Nearly 100 USD/ton lower than the same period last year
According to statistics from Reuters on August 10, the price of 5% broken parboiled rice at the world’s leading rice exporter, India, fell to $354-358/ton last week; The price of Thai 5% broken rice increased slightly from 385 – 408 USD/ton in the last week of July, the lowest level since 2 years. Meanwhile, the price of 5% broken rice in Vietnam (VN) remained unchanged, holding at $390/ton last week – the lowest level since February 2020. Compared with the same time last year with the average price of 485 USD/ton, the current export rice is nearly 100 USD/ton lower.
On August 10, the price of rice purchased in a number of provinces in the Mekong Delta region went sideways after a period of deep decline due to the impact of the Covid-19 epidemic. Specifically, the price of IR50404 rice is purchased by traders from 4,600 – 5,000 VND/kg, OM 9582 rice is priced at 4,600 – 4,900 VND/kg, OM 6976 is priced at 5,100 – 5,200 VND/kg, ST24 is from 6,100 – 6,200 VND/kg… At the same time last year, the price of rice purchased this year was about 1,000 VND/kg lower. Mr. Nguyen Van Don, Director of Viet Hung Co., Ltd (Tien Giang), said the purchase price of rice dropped sharply due to world rice prices fell. The amount of rice inventory of companies that have not been exported is very large, so many businesses are not interested in buying anymore. His company has more than 15,000 tons of rice in stock because the price is too low and cannot be sold.
So even though the price of rice bought in the market today is 1,000 dong/kg lower than the same time last year, the company did not buy it. “There are two reasons that are causing the situation of the rice production and export market to slow down and decrease sharply, that is: the export volume is too slow because we offer high prices, they do not buy. Vietnam’s 504 white rice now offers a higher price than the same type of Thailand. Due to the impact of the Covid-19 outbreak, the export price of many of their agricultural products has dropped significantly, including rice. So many customers flock to buy Thai rice instead. The second is that the epidemic situation in the South is too severe, production activities with the criteria of “3 on the spot”, who stays where they are… makes the rice market in the season but quiet. . The mill was closed, and it was too difficult to move rice from one province to another. Assuming we can buy rice, it’s not easy to have a rice mill now,” said Mr. Don. According to th
e Ministry of Industry and Trade, import and export activities may be negatively affected by the world and the region.
Southeast Asia is at the center of the epidemic, with the number of new Covid-19 infections rapidly increasing.
In the country, the Covid-19 epidemic broke out in many localities which are large commodity production areas, have the largest scale of import and export turnover of the country, and the implementation of social distancing under Directive 16 has disrupted the process of circulation and transportation of goods. Besides, the lack of empty containers and high freight rates are also obstacles for import and export activities in the last months of this year.
Facing difficulties in rice consumption and purchasing, the agricultural sector of the provinces is speeding up solutions to overcome difficulties. For example, Long An has directed localities to be flexible and proactive in procedures to facilitate traders to purchase and transport agricultural products. If there are no workers or machinery to harvest rice, the district’s agricultural sector must immediately advise the District People’s Committee to request the communes, wards and townships to sign a certificate so that people in the locality can travel conveniently. Mr. Don said at this time, if banks lend out-of-limits, give unsecured loans instead of mortgages, many reputable companies in rice export can participate in buying and saving rice in the field.
Proposal to purchase and temporarily store 4 million tons of rice
Updated to the last August 6 at the Online Conference connecting consumption and export promotion of agricultural and aquatic products in the Southern region and the Central Highlands 2021, the Ministry of Agriculture and Rural Development said that the Mekong Delta provinces have just harvested 700,000 hectares. For summer-autumn rice, about 800,000 hectares are harvested in August and September this year. This is also the time of the year with the highest rice production.
At the conference, the Ministry of Industry and Trade said that it would propose to the Government to deploy the purchase and storage of food with an output of nearly 4 million tons of rice, equivalent to 2.5 million tons of rice. This is to implement the policy of solving urgent needs for people in the Mekong Delta and at the same time to stock up in the context that the whole world will surely lack food after the Covid-19 epidemic. According to Mr. Pham Thai Binh, General Director Trung An Hi-tech Agriculture Joint Stock Company, to deploy and buy 4 million tons of rice, it is necessary to mobilize more private enterprises to suffice. In fact, any business that buys to rescue must also borrow money, but most businesses now have their loan limit expired, and want to call on businesses to participate in “rescuing” rice, so they have a policy of lending outside the limit for export enterprises. If large companies are able to participate, it is not advisable to impose rice rescue work on state corporations. Not
only half of the rice area is stuck in the field, must be harvested in August and September because in mid-September, the third autumn-winter crop has been harvested. Many localities have planted the autumn-winter crop for two years. month
already. Thus, if there is no early plan to deal with the procurement of summer-autumn and autumn-winter crops, this year’s rice industry will be affected by the Covid-19 epidemic in the world and in the country.
While most of the agricultural and aquatic products exported in the first seven months of this year grew, rice exports continued to decline. Data from the Ministry of Industry and Trade until the end of July shows that rice exports in the 7 months of this year decreased by 10.6% over the same period last year, reaching 3.6 million tons; value decreased by 0.6% to $1.9 billion. “Manufacturing fell sharply, how could exports not decrease. This is the general situation in this difficult time, very difficult to change.
The only solution is to increase the purchase and reserve for later sale,” Binh said, adding that the price of rice purchased in this year’s crop decreased by 1,000 VND compared to the same time last year, but compared to before the epidemic, rice prices are higher than 500-700 VND/kg. The export price of rice has decreased due to a decrease in world prices, but with Vietnamese rice there is also an element of “squeezing” because they know that Vietnam is in the harvest season and production is also stagnating because of the disease. With big customers going to the EU market, rice exports still increase. The report of the Ministry of Industry and Trade in the first 6 months of this year shows that the rate of taking advantage of tax incentives from EVFTA with exports increased by more than 29%. In which, rice exports to the EU increased by 3.73%, reaching US$ 5.2 million. “Directive 16 is still lingering, so after mid-August this year, we have to renegotiate with our partners to reduce the amount of rice expo
rted because we can’t load rice directly on large ships like before,” Mr. Binh added.