I. DOMESTIC MARKET
Production
After very cold days in the Lunar New Year holidays, taking full advantage of the warm weather, farmers in the Northern provinces were in a hurry to plant spring rice and subsidiary crops. As of Feb. 15, 2010, in the Northern localities, transplanted area reached 884.9 thousand ha, equivalent to 98.4% against the same period of the previous year. Of the figure, in Yen Bai, about 13,950 ha of 2009/10 winter-spring rice crop was transplanted, equal to 80% as planned. The province is expected to finish transplanting before Jan. 15 (Lunar month). Bac Giang transplanted nearly 33,000 ha of winter-spring rice crop, accounting for 65.6% of the total 50,000 ha as planned. Meanwhile, in Vinh Phuc, 23,000 ha of rice was transplanted. By the end of February, Vinh Phuc is expected to plant 31 thousand ha of rice with the paddy production 173,000 tons.
In the South, according to Department of Plant Protection of the Southern provinces,1,652,332 ha of 2009/10 winter-spring rice crop in the entire region was transplanted (of which, the Mekong river Delta region reached 1,530,900 ha, the Southeast region: 121,432 ha). 29,017 ha was in seeding stage, 246.681 ha was in productive stage, 641.559 ha blossoming one, 559.977 ha ripening one and 175.098 ha harvesting one.
According to the Ministry of Agriculture and Rural Development, Rice Grassy Stunt Virus, Rice Ragged Stunt Virus and Rice Black-streaked Dwarf Virus appeared the first time in the Northern provinces in 2009 tenth-month rice crop with complicated movement and rapid spread. According to the statistics, there are now 18 cities and provinces in the North Central region, Red River Delta and the North mountainous region detecting the paddy infected by those viruses with total area of over 30,000 ha.
In such situation, Prime Minister issued the Document No. 291/TTG-KTN, which allowed applying assistance policy to preventing and curing Rice Grassy Stunt Virus, Rice Ragged Stunt Virus and Rice Black-streaked Dwarf Virus. Assistance time is from date to the end of Dec. 31, 2011.
Domestic rice
Over the week, domestic rice saw many changes in price.
Ordinary paddy price dropped quite sharply in the markets like Dong Nai (down VND 500/kg to VND 5,500/kg) and Dong Thap (down VND 600/kg to VND 4,600/kg). Meanwhile, in both Hanoi and HCMC, ordinary paddy price rose to VND 6,200/kg (up 3.3% and 6.9% against the time before Tet, respectively).
Over the week, ordinary rice price remained stable or slightly increased, depending on localities. Specifically, in HCMC and Tien Giang, ordinary rice price stayed unchanged at VND 10,500/kg and VND 9,000/kg. However, in Da Nang and Can Tho, ordinary rice price rose slightly to VND 10,500/kg and VND 9,000/kg (both up VND 500/kg against the time before Lunar New Year).
Over the week, brown rice price kept dropping like the previous weeks. In Dong Thap, brown rice price slightly declined from VND 6,350/kg to VND 6,300/kg. In Tien Giang, brown rice price sharply dropped from VND 7,700/kg to VND 6,500/kg.
Domestic rice price saw many changes in reverse directions because of several factors. Of which, ordinary paddy and brown rice price dropped in many localities was due to the decline in rice export market, enterprises’ limit to purchase rice and sharp increase in domestic rice supply. Meanwhile, that ordinary rice price stayed quite stable or slightly rose was in the common trend of many other consumption commodities after Tet.
In the fact that some rice varieties were declining in price while supply was continuously increasing as localities are harvesting 2009/10 winter-spring rice, Prime Minister has asked the Vietnam Food Association (VFA) to direct exporters to prepare their capital and stock for purchasing the surplus rice from farmers. Specifically, the VFA has assigned enterprises to purchase rice for signed contracts. Moreover, they had to buy more 1 million tons of rice (equivalent to 2 million tons of paddy) for temporary reservation in the next 2 months. Also according to the VFA, paddy price insurance for the farmers would be implemented from 2009/10 winter-spring crop. With the average production cost of VND 2,200/kg, the VFA decided to insure the paddy price VND 4,000/kg, ensuring farmers to get profits of over 40%.
Rice for export
Over the week, Vietnam’s export rice price dropped sharply. Particularly, 5% brokens price declined from US$ 450/ton at the time before Tet to US$ 395/ton (down 12.2%). Similarly, 25% brokens price reduced from US$ 430/ton to US$ 370/ton (down 14%).
Export rice market continued to be “gloomy” mainly because of low demand for rice purchasing of the countries in the world. The Philippines, Vietnam’s biggest rice import market, has not opened any new tender to buy rice, yet. African countries met difficulty in their credit; therefore, trading among Vietnam and these markets was slowing down. Moreover, many customers did not hurry to buy rice as the rice supply in Vietnam and Thailand was sharply increasing, instead they waited for lower price and subsequently decided to buy.
One more factor affecting Vietnam’s current export rice price was the move to export of Thailand. Over the week, Thailand continued opening tender to sell rice from its stock with the volume of 500 thousand tons. Previously, in Jan. 2010, this country had opened the tender to sell 375 thousand tons of rice; however, they had to cancel the result due to too low offered price. Huge rice stock of Thai Government and the move to open its stock were creating great pressure on Vietnam’s export rice.
Although export rice price was likely to drop, according to the VFA, the world’s rice demand in 2010 was forecast to be stronger than the previous year due to effects of climate change on agricultural production in many countries. Rice export market was forecast to be exciting from quarter II. Therefore, the VFA’s policy on rice export management was selling rice basing on signed contracts together with purchasing rice for reservation, waiting for higher price to sell.
According to the VFA’s statistics, nationwide rice export from Feb. 1 to Feb. 11, 2010 reached 140,082 tons, worth US$ 69.332 million. Accumulated rice exports from Jan. 1 to Feb. 11, 2010 reached 494,148 tons, worth US$ 233.401 million.
II. WORLD MARKET
Thailand
Like Vietnam’s rice price, Thailand’s export rice price sharply dropped over the week. In particular, 5 brokens, 25 brokens and 100%B declined in price from US$ 550/ton, US$ 530/ton and US$ 585/ton to US$ 505/ton, US$ 460/ton and US$ 530/ton, (down 8.2%, 13.2% and 9.4%, respectively).
Thailand’s export rice price reduced mainly because the government opened its rice stock. Since this country opened the tender to sell rice in Jan. 2010 (375 thousand tons), rice price has started dropping. Rice price went down quite sharply over the week when Thai Ministry of Commerce opened the tender to sell 500 thousand tons of rice. In the tender, 11 participating enterprises offered the price, ranging around 14.000-15.000 Baht/ton for 5 brokens, much lower than the market price. This price was even lower than the average price of 16,000 Baht/ton, offered in January tender. Therefore, the possibility that Thailand accepted this tender’s result was very low.
The Philippines
The Philippines might have to import more 800 thousand tons of rice in 2010 to offset the losses caused by El Nino phenomenon. Losses for this country’s rice production caused by El Nino phenomenon was estimated at 7 billion Pesos (about US$ 151 million). According to the National Food Association (NFA), the Philippines’ rice import was forecast to reach the record of about 3.25 million tons in 2010.
Recently, this Philippines’ Government has lifted the quota on rice import to about 3-3.5 million tons because of drought, which threatened this country’s rice production. There were about 2,000 farmers who transferred to plant subsidiary crops as rice planting needed water; therefore, the possibility of loss caused by the drought was higher.
III. MARKET PROSPECT
Domestic market
Domestic rice supply keeps increasing when the Southern localities harvest 2009/10 winter-spring rice. In addition, less favorable rice export market will negatively affect the domestic rice price. Due to these factors, AGROMONITOR forecasts that domestic rice price will drop quite sharply in the coming time when enterprises have not started to promote rice procurement.
Export rice price is very low, much lower than the guideline of the VFA (US$ 440/ton). Therefore, although Vietnam export rice is suffering from many pressures on reducing price such as low import demand and Thailand’s plentiful supply, it is difficult to remain the declining momentum like present. In addition, the VFA is trying to deliver measures to prevent enterprises from dumping rice. Therefore, export rice price is forecast to remain low in the coming time.
World market
World rice market in the recent time has sharply declined, mainly because main rice importers have not promoted to import, yet. Meanwhile, Thailand, the world’s largest rice exporter, continuously opened the tenders to sell rice from its government stock. In the coming time, if rice importers continue limiting to buy rice like present, world rice price is forecast to further drop.
* All rights are reserved. Any recommendations, data contained in this publication are extracted from publicized sources, guaranteed validity by AGROMONITOR starting from the time of publication. Expressions of opinion are those of AGROMONITOR only and prepared for the use of AGROMONITOR clients and may not be redistributed, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of AGROMONITOR
APPENDICES
MARKET DATA
Appendix 1
|
Date
|
Body in charge
|
Concerning
|
Content
|
|
04/06/2009
|
Government
|
The regulation of production and consumption of rice in the Mekong River Delta
|
The Government will not limit rice exports in 2009
|
|
Rice export targets will be adjusted in accordance with the situation of domestic rice production
|
|
The Government will not allocate rice export quotas to the provinces
|
|
A policy on buying rice for temporary reserves to prevent price decreases may be adopted
|
|
Provinces need strictly limit the planting of low-quality paddy varieties.
|
|
15/6/2009
|
Government
|
Notification No. 176/TB-VPCP on strengthening the regulation of rice export
|
To ensure food production and trading activities by preventing stagnation of commercial rice and assuring profits for rice growers.
|
|
10/08/2009
|
VFA
|
First phase purchase
|
21 rice exporting enterprises that are members of the Association will purchase 400,000 tons of summer-fall rice for phase 1 at a floor price of VND 3,800/kg.
|
|
09/09/09
|
VFA
|
Second phase purchase
|
The Association will purchase an additional (phase 2) 500,000 tons of rice, equivalent to 1 million tons of paddy rice at a price of no less than VND 3,800/kg.
|
|
23/12/09
|
Government
|
Resolution No. 63/NQ-CP of ensuring the national food security
|
The target is that up to 2012, food shortage of the people will be stopped and as of 2020, the income of food producers is 2.5 times higher than present.
|
|
04/02/10
|
Government
|
Document No. 221/TTG-KTTH on rice export management in 2010
|
Ministry of Agriculture and Rural Development in Feb. 2010 balanced and announced rice volume, which might export in 2010.
|
|
22/02/10
|
Government
|
Document No. 291/TTG-KTN
|
Prime Minister issued the Document No. 291/TTG-KTN, which allowed applying assistance policy to preventing and curing Rice Grassy Stunt Virus, Rice Ragged Stunt Virus and Rice Black-streaked Dwarf Virus nationwide.
|
Appendix 2:
|
Time
|
Volume (ton)
|
Value (US$)
|
|
First 13 days of November 2009
|
131,610
|
54,920,000
|
|
First 20 days of November 2009
|
201,740
|
83,376,000
|
|
November 2009
|
334,756
|
137,630,000
|
|
First 18 days of December 2009
|
138,083
|
54,421,000
|
|
First 25 days of December 2009
|
202,451
|
82,654,000
|
|
December 2009
|
298,230
|
125,250,000
|
|
First 15 days of January 2010
|
87,662
|
38,353,355
|
|
First 22 days of January 2010
|
191,333
|
85,304,876
|
|
First 29 days of January 2010
|
338,081
|
154,721,485
|
|
First 5 days of February 2010
|
38,161
|
18,003,000
|
|
First 11 days of February 2010
|
140,082
|
69,332,000
|
Source: VFA
Appendix 3:
|
Accumulated rice exports from Jan. 1, 2010 to
|
Volume (ton)
|
Value (US$)
|
|
05/02/2010
|
392,226
|
182,072,000
|
|
11/02/2010
|
494,148
|
233,401,000
|
1. Prices for some Thai rice varieties, US$/ton
|
Rice variety
|
Date 24/02/2010
|
Week 8 (22/02-28/02/2010)
|
Compared to the previous week
|
|
100%B
|
530
|
530
|
-9.4
|
|
100% parboiled
|
545
|
545
|
-8.4
|
|
15% brokens
|
485
|
485
|
-9.3
|
|
10% brokens
|
500
|
500
|
-8.3
|
|
5% brokens
|
505
|
505
|
-8.2
|
|
25% brokens
|
460
|
460
|
-13.2
|
Source: AGROMONITOR
2. Prices for some Vietnamese rice varieties, US$/ton
|
Rice variety
|
Date 24/02/2010
|
Week 8 (22/02-28/02/2010)
|
Compared to the previous week
|
|
|
|
5% brokens
|
395
|
395
|
-12.2
|
|
|
25% brokens
|
370
|
370
|
-14
|
|
Source: AGROMONITOR
3. Ordinary rice prices in some markets, VND/kg
|
Market
|
Date
|
Price
|
Week 8 (22/02-28/02/2010)
|
Compared to the previous week
|
|
Ben Tre
|
23/02/2010
|
9500
|
9500
|
0
|
|
Can Tho
|
24/02/2010
|
9000
|
9000
|
5.9
|
|
Da Nang
|
24/02/2010
|
10500
|
10500
|
2.9
|
|
Hanoi
|
24/02/2010
|
11000
|
11000
|
-2.2
|
|
HCMC
|
24/02/2010
|
10500
|
10500
|
0
|
Source: AGROMONITOR
4. Ordinary paddy rice prices in some markets, VND/kg
|
Market
|
Date
|
Price
|
Week 8 (22/02-28/02/2010)
|
Compared to the previous week
|
|
Can Tho
|
24/02/2010
|
6000
|
6000
|
9.1
|
|
Da Nang
|
24/02/2010
|
5500
|
5500
|
0
|
|
Dong Nai
|
23/02/2010
|
5500
|
5500
|
-8.3
|
|
Ha Noi
|
24/02/2010
|
6200
|
6200
|
3.3
|
|
HCMC
|
24/02/2010
|
6200
|
6200
|
6.9
|
Source: AGROMONITOR
5. Weekly ordinary rice prices in some markets, VND/kg
|
Week
|
An Giang
|
Ha Noi
|
Kien Giang
|
HCMC
|
|
51(14/12-20/12/2009)
|
10000
|
10000
|
8500
|
11500
|
|
52(21/12-27/12/2009)
|
10000
|
10500
|
8500
|
11500
|
|
53(28/12/09-3/1/2010)
|
10000
|
11000
|
8500
|
11000
|
|
01(04/01-10/01/2010)
|
10000
|
11000
|
8200
|
11000
|
|
02(11/01-17/01/2010)
|
10000
|
11000
|
8200
|
11000
|
|
03(18/01-24/01/2010)
|
10000
|
11000
|
8200
|
11000
|
|
04(25/01-31/01/2010)
|
10000
|
11000
|
8000
|
11000
|
|
05 (01/02-07/02/2010)
|
10000
|
11000
|
8000
|
10500
|
|
06(08/02-14/02/2010)
|
10000
|
11250
|
8000
|
10500
|
|
08(22/02-28/02/2010)
|
10000
|
11000
|
8000
|
10500
|
|
|
|
|
|
|
Source: AGROMONITOR
6. Weekly prices for brown rice in some markets, VND/kg
|
Week
|
An Giang
|
Ben Tre
|
Dong Thap
|
Kien Giang
|
|
49(30/11-06/12/2009)
|
7500
|
8000
|
7550
|
6500
|
|
50(07/12-13/12/2009)
|
7300
|
8800
|
7800
|
7000
|
|
51(14/12-20/12/2009)
|
7850
|
8800
|
7500
|
7750
|
|
52(21/12-27/12/2009)
|
7380
|
8800
|
7450
|
7750
|
|
53(28/12/09-3/1/2010)
|
7430
|
8800
|
7450
|
7750
|
|
01(04/01-10/01/2010)
|
7430
|
8800
|
7450
|
-
|
|
02(11/01-17/01/2010)
|
7360
|
9000
|
7350
|
7400
|
|
03(18/01-24/01/2010)
|
7360
|
8800
|
7350
|
7350
|
|
04(25/01-31/01/2010)
|
7360
|
8800
|
7350
|
7350
|
|
05 (01/02-07/02/2010)
|
7360
|
8800
|
6950
|
7350
|
|
06(08/02-14/02/2010)
|
6800
|
8800
|
6950
|
7350
|
|
08(22/02-28/02/2010)
|
6800
|
8800
|
6300
|
7350
|
Source: AGROMONITOR
7. Weekly prices for ordinary paddy rice in some markets, VND/kg
|
Week
|
Ben Tre (wholesale)
|
Can Tho (retail)
|
Dong Nai (retail)
|
|
52(21/12-27/12/2009)
|
7000
|
5700
|
5500
|
|
53(28/12/09-3/1/2010)
|
7000
|
5500
|
5500
|
|
01(04/01-10/01/2010)
|
6500
|
5500
|
5200
|
|
02(11/01-17/01/2010)
|
-
|
5600
|
5200
|
|
03(18/01-24/01/2010)
|
-
|
5500
|
5400
|
|
04(25/01-31/01/2010)
|
6500
|
5400
|
5600
|
|
05 (01/02-07/02/2010)
|
6500
|
5800
|
6000
|
|
06(08/02-14/02/2010)
|
6500
|
5500
|
6000
|
|
08(22/02-28/02/2010)
|
6500
|
6000
|
5500
|
Source: AGROMONITOR
8. Weekly prices for Vietnamese 5% and 25% broken rice varieties, and Thai 5% and 25% broken rice varieties, US$/ton
|
Week
|
Vietnamese 5% brokens
|
Vietnamese 25% brokens
|
Thai 5% brokens
|
Thai 25% brokens
|
|
48(23/11-29/11/2009)
|
493.33
|
461.67
|
530
|
456.67
|
|
49(30/11-06/12/2009)
|
490
|
462.5
|
530
|
470
|
|
50(07/12-13/12/2009)
|
540
|
470
|
560
|
510
|
|
51(14/12-20/12/2009)
|
540
|
470
|
595
|
535
|
|
52(21/12-27/12/2009)
|
495
|
460
|
590
|
535
|
|
53(28/12/09-3/1/2010)
|
495
|
460
|
590
|
535
|
|
01(04/01-10/01/2010)
|
490
|
465
|
560
|
535
|
|
02(11/01-17/01/2010)
|
490
|
465
|
560
|
535
|
|
03(18/01-24/01/2010)
|
490
|
465
|
560
|
535
|
|
04(25/01-31/01/2010)
|
473
|
458
|
555
|
530
|
|
05 (01/02-07/02/2010)
|
472.5
|
452.5
|
555
|
530
|
|
06(08/02-14/02/2010)
|
450
|
430
|
550
|
530
|
|
08(22/02-28/02/2010)
|
390
|
370
|
505
|
460
|
Source: Agro Monitor
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