China has been buying more Vietnamese rice this month after its August imports hit a five-month low, boosting Vietnam’s export prices for the grain and narrowing the spread between high and low quality varieties.
China, top rice producer and one of the largest importers, is also Vietnam’s biggest customer for the staple grain, and its purchases are in danger of pushing its southern neighbour’s prices too high for other markets.
Just last week Vietnam had to revise down an initial offer into a Philippine buy tender to win a supply contract along with Thailand for deliveries of 25 percent broken rice over the November 2015-March 2016 period.
“China has just stepped up buying of all kinds of Vietnamese rice,” a trader at a foreign firm in Ho Chi Minh City said.
In a sign of the upward pressure put on the Southeast Asian nation’s rice export market, Vietnam will raise its price floor for 25 percent broken rice by around 3 percent to $340 a tonne, free-on-board (FOB), later this week.
“Even before the price increase, Vietnam has had a hard time finding any rice buyers so far, while after the price hike, it will be more difficult to find buyers,” a trader at a regional trading firm in Ho Chi Minh City said.
Vietnam’s rice exports in the January-August period are down nearly 10 percent from a year ago to 4.05 million tonnes, lowest for the period in six years, according to official customs data.
Still, China’s purchases of Vietnamese rice were up about 40 percent from a year ago in August, with the top buyer’s purchase over the first eight months of the year accounting for nearly 30 percent of Vietnam’s exports.
China’s purchases – along with the five-month supply contract to the Philippines for 450,000 tonnes of rice – have not only lifted prices, but also narrowed the gap between the 25 percent broken rice and the higher quality 5 percent broken to as little as $3-$5 a tonne from around $20.
China’s rice imports this year are forecast at 3.2 million tonnes, up 6.7 percent from 2014, the U.N. Food and Agriculture Organization has said.
Over the January-August period, China’s rice imports from Vietnam rose to 1.18 million tonnes, up 31 percent from the same period in the previous year.
(Source – http://www.blackseagrain.net/novosti/china2019s-purchases-lift-rice-export-prices-in-vietnam)