Rice exports from Vietnam, the world’s third-largest shipper, will probably rebound this year as lower prices boost demand, while competition with Thailand keeps the gain to single digits, according to the government.
“The Chinese market will definitely become active again after quiet periods late 2014 and early this year,” said Tran Tuan Anh, deputy minister of industry and trade. Competitive prices, suitable varieties, and geographic proximity in particular to China, are Vietnam’s advantages over Thailand, the top shipper. Exports may rise “less than 10 per cent” in 2015, he said in an interview in Hanoi on 4 March.
Global output is set to be near last year’s record, and Thailand will ship more this year than any country ever, US government data show. Futures fell to a four-year low in Chicago, helping cut food costs to the lowest since 2010.
While Thailand’s export prices will be pressured as the country sells about 17 million metric tons in state reserves over the next two years, they have been higher than that of Vietnam, India and Pakistan, the Thai Rice Exporters Association says.
“While generally, Vietnamese rice costs less, Thailand does offer lower prices sometimes,” Anh said, without giving an estimate. Thailand is trying to increase access to Africa, where India and Pakistan also compete “fiercely,” he said.
Exports from Vietnam dropped to 6.4 million tons in 2014 from 6.7 million a year earlier, General Statistics Office data show. Sales in the first two months of 2015 may reach 515,000 tons, down 34 per cent from a year ago, the office estimates. Shipments will pick up from the second quarter and bring the total this year to match or exceed last year’s figure by “a little bit,” Anh said, without giving exact figures.
Vietnam will also continue to count on demand from its traditional markets like the Philippines, Malaysia, and Indonesia, Anh said. While the countries are trying to boost production and become self-sufficient, their efforts will take time and demand is still high this year, he said.
Bloomberg News, edited by ESM