Vietnam rice growers face low prices as exports down
Monday, 19 July 2010
PHU NHUAN, July 18 (AFP): Over-production and lower exports have left rice farmers in Vietnam's Mekong Delta holding on to their stocks in the face of lower prices, analysts say.
Vietnam is the world's second-largest exporter of rice and the Delta accounts for more than half of the country's production.
But surpluses, the beginning of the wet season, and a shortage of places for drying wet rice are adding up to heavy potential losses, says Vo Tong Xuan, an internationally- recognised rice expert.
He fears Vietnam will lose one million tonnes of the grain this season.
The country hopes to sell about six million tonnes on the international market in 2010, a figure similar to last year's, but shipments fell in the first half. Between January and June Vietnam exported more than three million tonnes, down 8.76 per cent on the same period a year earlier, according to official statistics.
Export value for the period fell only 1.32 per cent, which Xuan said indicates that shippers received a good price. The farmers, however, did not fully benefit from those proceeds.
Xuan, based in the Delta province of An Giang, said farmers may have over-produced this year on an expectation of earnings after state-owned VinaFood assured them the Philippines would buy in bulk.
But the Philippines had not yet confirmed all its purchases, Xuan said, while other buyers like those in Europe were betting on fresh falls in the price and delaying their orders.
Le Van Banh, director of the Mekong Delta Rice Research Institute, notes that competition from other exporters including India and Pakistan leaves less room for Vietnamese grain abroad, while at home "we have an abundance of rice so the prices are relatively low."
Bags of rice piled on the porch of Dang Thi Bay's house in Tien Giang province symbolise the problem. With prices down she is not rushing to sell her 15 tonnes (16.5 tonnes) of stock.
"If we take into account the fertiliser price and the costs of production, selling now would bring a loss. It is too cheap," says the mother of five.
"We're waiting for the price to go up, but don't know how long that will be," Bay says at her home in Phu Nhuan commune.
For one kilogramme (2.2 pounds) of paddy-unmilled rice-she can get between 3,200 and 3,300 dong (about 18 cents) from a local processor. That is a drop from 4,000 to 4,200 dong last year.
Bay has started growing a new crop and says she can keep her current stock for two months before rainy-season humidity could take its toll. She fears losing her harvest.
Vietnam is the world's second-largest exporter of rice and the Delta accounts for more than half of the country's production.
But surpluses, the beginning of the wet season, and a shortage of places for drying wet rice are adding up to heavy potential losses, says Vo Tong Xuan, an internationally- recognised rice expert.
He fears Vietnam will lose one million tonnes of the grain this season.
The country hopes to sell about six million tonnes on the international market in 2010, a figure similar to last year's, but shipments fell in the first half. Between January and June Vietnam exported more than three million tonnes, down 8.76 per cent on the same period a year earlier, according to official statistics.
Export value for the period fell only 1.32 per cent, which Xuan said indicates that shippers received a good price. The farmers, however, did not fully benefit from those proceeds.
Xuan, based in the Delta province of An Giang, said farmers may have over-produced this year on an expectation of earnings after state-owned VinaFood assured them the Philippines would buy in bulk.
But the Philippines had not yet confirmed all its purchases, Xuan said, while other buyers like those in Europe were betting on fresh falls in the price and delaying their orders.
Le Van Banh, director of the Mekong Delta Rice Research Institute, notes that competition from other exporters including India and Pakistan leaves less room for Vietnamese grain abroad, while at home "we have an abundance of rice so the prices are relatively low."
Bags of rice piled on the porch of Dang Thi Bay's house in Tien Giang province symbolise the problem. With prices down she is not rushing to sell her 15 tonnes (16.5 tonnes) of stock.
"If we take into account the fertiliser price and the costs of production, selling now would bring a loss. It is too cheap," says the mother of five.
"We're waiting for the price to go up, but don't know how long that will be," Bay says at her home in Phu Nhuan commune.
For one kilogramme (2.2 pounds) of paddy-unmilled rice-she can get between 3,200 and 3,300 dong (about 18 cents) from a local processor. That is a drop from 4,000 to 4,200 dong last year.
Bay has started growing a new crop and says she can keep her current stock for two months before rainy-season humidity could take its toll. She fears losing her harvest.