China’s appetite for local rice

Vietnam’s over riding goal is to consolidate its own food security

A spike in rice exports to China is raising shortage concerns in Vietnam.

According to a Vietnam Food Association (VFA) report presented to the Ministry of Industry and Trade (MoIT) last week, some local and Chinese traders were hunting rice in Vietnam, particularly in the Mekong Delta, for shipment to China.

Under the VFA’s calculations, about 500,000-600,000 tonnes have been sold to China since mid July. 

“If this situation continues, many Vietnamese firms will face more difficulties in finding sources to fulfil their shipment contracts,” said VFA’s vice general secretary Huynh Minh Hue.

In the first seven months of this year, Vietnam exported 4.1 million tonnes of rice worth $1.8 billion.

Local firms have signed contracts to sell around six million tonnes of rice for 2010. There will be 1.9 million tonnes to be shipped abroad during the last five months of the year.

VFA’s statistics showed that there was 1.4 million tonnes of rice still in stock and there would be an additional one million tonnes from the summer-autumn and autumn-winter crops this year used for export in the last months of 2010 and early months of 2011.

“If we cannot control the sales of Vietnamese rice to China [not among Vietnam’s officially-signed shipment deals], a shortage of rice for overseas shipments will occur,” Hue said.

MoIT Minister Vu Huy Hoang stressed that the increase in Chinese traders buying Vietnamese rice during the past days was unusual.

“Some 500,000-600,000 tonnes is a very big number, particularly as Vietnam is looking to fulfil official export deals and many countries [including China] were hit by natural disasters, which seriously affected their food security,” Hoang said.  

According to the MoIT, it will join with the VFA and the Ministry of Agriculture and Rural Development to closely control the situation to help ensure supplies for the country’s export deals and food security. 

Since mid July, 48 rice trading firms in the country, besides seeking supplies for their export deal realisation, started purchasing rice from local farmers to realise the government’s instruction to store one million tonnes of rice to ensure outlets for farmers’ products and prevent any price shocks in the marketplace.

By August 8, local firms had purchased some 470,000 tonnes of rice, making up nearly a half of the government’s plan.