China may buy 2 mln T of Vietnamese rice, support prices
29/03/2012
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Vietnam’s rice exports to neighbouring China could climb six-fold this year, a Vietnamese industry official was quoted as saying on Thursday, supporting domestic prices during the peak harvest season.
Two million tonnes of rice imports will bring China close to the world’s top buyers, Indonesia and Nigeria, even though some traders were sceptical about a large jump in purchases by the world’s biggest producer and consumer of the staple.
China’s rice imports are set to rise to around 1.5 million to 2 million tonnes, via official and unofficial trade channels, Deputy Chairman Pham Van Bay of the Vietnam Food Association was quoted as saying by the Ho Chi Minh City Law newspaper.
Bay’s forecast, beating an earlier industry projection of about 1 million tonnes, represents at least a fifth of the 7.2 million tonnes Vietnam aims to export this year, a level that could help it overtake Thailand to become the world’s top rice exporter.
Bay declined comment when contacted by Reuters as he was not authorised to speak to foreign media.
Last year, China imported 309,000 tonnes of rice from Vietnam, almost 150 percent more than 124,500 tonnes in 2010, Vietnam Customs data shows.
If China imports 2 million tonnes of rice, it would be the highest since at least 2006.
China has been buying rice from Vietnam and Pakistan in recent months to keep a lid on domestic prices, which have climbed on the back of government support for farmers.
Chinese traders said it was profitable to import rice from Vietnam.
“There are rising imports from Vietnam as domestic prices are expensive and we can not make any money from selling domestic rice,” said one rice trader in Guangxi, near the border with Vietnam.
“There is no shortage of supply, but the government is supporting farmers which is keeping domestic prices high.”
CHINESE BUYING SUPPORTS PRICES
Although ample global supplies are likely to keep the rice market in check, Vietnam’s 5 percent broken rice sold to Chinese firms rose to $420 a tonne last week from $405 in early February, a rice exporter based in the Mekong Delta province of An Giang said.
This week the same variety is being offered at $435-$445 a tonne, on an FOB basis.
Analysts said Chinese customs data has not shown any big rice imports, which could indicate cargoes were being smuggled into the country, while some traders doubt China’s imports will reach 2 million tonnes.
“It is not a situation where China has a rice shortage. God forbid, if that situation arises the market will be on fire as they consume more than 130 million tonnes of rice a year,” said the head of rice business at a global trading company in Singapore.
“China is still selling rice to Japan, which means they have a surplus. We don’t expect such a large increase in imports.”
Indonesia emerged as the world’s biggest rice importer, buying 2.8 million tonnes in 2010/11, followed by Nigeria which imported 2.3 million tonnes, according to the U.S. Department of Agriculture.
It has estimated China’s milled rice production in 2011/12 at 140.5 million tonnes, up from 137 million tonnes a year ago.
Hong Kong and Taiwan have also been looking at Vietnamese rice, which could create “a breakthrough for Vietnamese exporters”, Bay was quoted as saying during a market survey in China.
However, a state rice exporter in Ho Chi Minh City said: “There is strong demand from China for (Vietnamese) rice, but if China doesn’t change its method of delivery, there may be no breakthrough.”
She said China preferred to use shipping containers for rice loading to ease inland distribution, which had led to a shortage of containers.
“Now we can only load for old contracts. If China does not change, we are not sure if there will be a surge in shipments,” she said.
Source: Sharenet
http://www.angimex.com.vn/en/2012/03/china-may-buy-2-mln-t-of-vietnamese-rice-support-prices/
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