PRICES of unmilled rice fell further in Vietnam after it failed to obtain a government-to-government order from the Philippines in the second half of May and increased China import tariffs in July, according to the United States Department of Agriculture.
According to the USDA’s Global Agricultural Information Network (GAIN), prices in Vietnam were propped up in the first five months of the year despite a bumper harvest due to high export demand, but began to fall in May with the harvest of the second crop.
According to the Vietnam Food Association, Vietnam exported 0.7 million metric tons of rice to the Philippines, and 1.1 million metric tons to China, which is Vietnam’s largest export market.
It said the price of unmilled rice, known in the trade as paddy, fell to 5,900 Vietnamese dong per kilogram in September from 6,500-6,600 dong in May.
The Philippines’ National Food Authority (NFA) allocated a total of P6.1 billion to procure 250,000 metric tons of rice. In April, the NFA rejected an offer from Vietnam of $540 per metric ton (MT) for a shipment of 50,000 MT of rice at a grade of 15% broken grains. A Thai offer of $530/MT for 120,000 metric tons of 25% brokens.
The reference price of NFA was $483.63 per metric ton for 15% brokens, and $474.18 for 25% brokens, which both countries failed to match.
The bid’s failure led to the decline in inventories of NFA rice, leaving consumers no choice but to buy from commercial dealers.
The NFA Council recently approved the importation of 750,000 MT of rice arriving in batches of 250,000 MT every two weeks.
At least 13 bidders from Thailand and Vietnam were present in the pre-bid meeting for the first batch of imports. Standby volume of 1 million MT has also been authorized for 2019, according to the NFA Council.
According to GAIN, paddy prices in Vietnam had been propped up by an expected increase in demand from the Philippines and Indonesia by the end of the market year 2017-2018.
The USDA estimates that China will remain the largest rice importing country, with shipments projected at 5.5 million MT in 2019. — Reicelene Joy N. Ignacio