Traders tread cautiously as rice prices surge

Kim Em, who has sold the grain for more than 30 years in Cao Lanh City Market in the southern Dong Thap Province, says: "In the morning I sold rice at VND16,000 (US$0.68) per kilogram. In the afternoon I had to buy rice at VND17,000 per kilogram.

"Now I only buy enough to sell for a few days. I don’t dare stock up large quantities for fear of losses if prices go down quickly."

Kim Em sells rice at a stall in Cao Lanh City Market in the southern province of Dong Thap. Photo by VnExpress/Ngoc Tai

Thai Thi Binh, the owner of another stall, says she used to buy 50 bags of rice at a time, but now only buys 10.

She says the price hike is similar to the one in 2008, but now people are not hoarding the grain. That year, seeing prices increase rapidly, she hastily stocked up, but suffered heavy losses when they dropped sharply.

In Ca Mau Province too, rice prices surged over the past week.

Sang, who owns a rice shop in the Ward 4 market in Ca Mau City, says prices rose by VND1,500-2,000 per kilogram. In the face of rapid price fluctuations, he did not stockpile too much.

In Ho Chi Minh City prices are rising virtually every day, with those of fragrant rice jumping by VND2,000 in a week to VND18,000-25,000 per kilogram.

Nguyen Van Thanh, a rice trader in the city’s Binh Tan district, says rice traders have been hiking prices by VND300-500 every day.

The price hike is affecting businesses that make products from rice.

Pham The Hai, director of Green Starch Joint Stock Company in Sa Dec City, Dong Thap Province, says his factory needs 45 tons of rice per month on average to make noodles and other products.

Average prices are more than 50% up from a month ago, meaning contracts signed three months ago are losing money, he explains.

My Ngoc, the owner of a workshop making fresh noodles in Dong Thap, says it has been losing VND500-1,000 per kilogram of rice in the last two weeks as prices skyrocketed.

Economist Tran Huu Hiep says domestic rice prices are steadily bridging the gap with global rates.

Global demand is increasing and supply is decreasing due to extreme weather and recent rice export bans imposed by several countries.

The prices of 5% broken rice exported by Vietnam are now at the highest since 2008 at US$660 per ton.

Sang’s rice shop in the southern town of Ca Mau. Photo by Anh Minh

On August 6 Prime Minister Pham Minh Chinh called for ensuring food security while also seizing opportunities to increase rice exports amid the current high global prices to benefit farmers.

He instructed the Ministry of Agriculture and Rural Development and other ministries and local authorities to ensure this year’s production target of 43 million tons of paddy, equivalent to 20 million tons of rice, is achieved.

By early August more than 24 million tons had been harvested in the country. If there are no abnormal changes in the weather, the output will be adequate to meet domestic and export demand, according to the ministry.

It has estimated exports of 7-7.5 million tons.