The price of exported rice stands at a rather high level; however, from now to the end of this year, Vietnamese enterprises cannot continue to sign exporting contracts.
 
In 2007, particularly in Malaysia market, quantity of Thai exported rice into this market can increase by 40% in comparison with last year, about 560,000 tons. Up to the mid of August, Thailand has exported 4.86 million tons. Recently, exporters of Thailand are actively purchasing raw rice to conduct their signed contracts.

The exporting rice price of Thailand hardly decreases because of big demands from domestic market. In the last two weeks, the price slightly decreased due to the fluctuation of exchange rate between the US dollar and baht. At the beginning of last week, after the declaration of Thai government to lengthen its price intervention program to the end of August, the rice price in this market slightly increased again. The price of 100% B level rice is kept at 333-334 US dollars per ton; 5% broken rice, 322-324 US dollars per ton.

Recently, the meeting on food safety of exported rice of Vietnam, Thailand, Laos, Cambodia, and Myanmar, the 5 nations controlling 45% of the world’s exported rice, was held in Ha Long City. Statistics shows that in 2007 the world food security reserve fund has only 76 million tons rice left in comparison with 140 million tons in the previous years. This year, the world demand for rice is 245 million tons whilst only about 240 million tons can be supplied, shortage of 5 million tons.

At the beginning of this week, the exported price of Vietnamese rice stands at high level. The price of 5% broken rice is about 315 US dollars per on, and 297 US dollars per ton for 25% broken rice. The rice price increases partly because the freight cost has risen for months. For example, the freight to Africa increased about 40 US dollars per ton, 10 US dollars per ton to Asia, etc.

Up to the tenth of August, Vietnamese enterprises have exported approximately 2.87 million tons. Despite the favorable conditions in the market, they hardly continue to sign new contracts because total exported quantity signed has been 4.5 million tons, equal to the exporting target for the whole year.

At the beginning of this week, the rice price in Cuu Long delta increases from 3,000 to 3,050 VND/kilogram. However, the supply is limited. Traders have to come to the areas that late summer-autumn rice is harvesting like An Giang. In Can Tho City, the price is 4,050 – 4,100 VND.

After a period of reduction, the rice price in Cuu Long delta is now increasing by 70 to 80 VND per kilogram due to the decrease in supply. Some husking and trading rice enterprises said that the price would still increase.

At the beginning of this August, Commercial Research Institute (Ministry of Industry) reported that we had run out of rice for exporting. In 2007 Vietnam has estimatedly only 8.7 million tons commercial rice. Therefore, enterprises will focus on purchasing 1.63 million tons only to conduct previous signed contracts, in which 0.1 million tons is accepted to delay until the beginning of 2008. In theory, thus, they can sign new contracts with maximum 0.1 million tons this year.

The Government has directed to stop signing new exporting contracts. If the domestic supply is positive by September, Ministry of Industry then will calculate to raise the target of 4.5 million tons. However, according to Plant Protection Department, the autumn-winter and winter crop areas infected by nilaparvata lugens or rice ragged stunt virus are increasing and partial influence areas whose scale from few to hundreds hectares in Dong Thap, Long An, Hau Giang and so on.

Whereas, South West monsoon winds strongly in company with rain and storm which gives favorable condition for epidemic to spread out in both South-east and Central-south area. Over 1,500 hectares of summer-autumn, autumn-winter and winter crops are infected.

Hence, to ensure food security, that Vietnamese enterprises sign new exporting contracts in the coming months is impossible.