Vietnam: Enterprises should not sign more rice export contracts

Vietnamese rice exporters have signed contracts to export 3.5mil tonnes so far this year, and they have been advised not to sign more contracts.Nguyen Dang Chi, Deputy Director of the Import-Export Department under the Ministry of Trade, said that Vietnam had exported 1.8mil tonnes of rice so far this year. With the current rate of delivery, by the end of June 2007, Vietnam will have exported 2.2mil tonnes of rice, while the Government previously decided that rice exports would be 4.5mil tonnes this year.

In fact, the volume of export rice in the signed contracts has nearly reached the targeted level. The most important task now is to ensure smooth production to get stable output, and try to obtain high productivity to fulfill the export plan.

Though rice exporters still have quotas for export, they should not sign more contracts at this moment, as the yield of the next crop remains uncertain.

Paddy cultivation depends heavily on the weather. Meanwhile, the rice export price fluctuates and domestic prices now remain at high levels, equivalent to that of Thailand’s. This will make Vietnam’s rice less competitive.

Enterprises are not being guided in signing contracts on rice exports for the fourth quarter at this moment but no one can know for sure about the rice price and output at that time. The Government is keeping cautious about rice exports; therefore, it will only consider adjusting the rice export goal in the third quarter of the year.