Farmers cast hungry eye over Thai rice prices
by Le Hung Vong
Contrary to all predictions and forecasts, rice prices have gone down in the local market for the second consecutive week, making local farmers unhappy.
Farmers in the Cuu Long (Mekong) Delta provinces of Tien Giang, Long An, Soc Trang and Tra Vinh said IR50404 was currently selling atVND 5,200-5,300 per kilo, a decrease of VND100-200 per kilo compared with the price on September 8. Despite the lower price, demand for rice variety remained very weak, they said.
After reaching record highs of VND7,600 per kilo in late August, the prices of long grain rice have gone down by VND200-300 per kilo. The OM 4218,OM 5451 varieties are selling at VND5,700-5,800 per kilo, while OM 4900 is selling at VND5,800-5,900.
Truong Thanh Phong, chairman of the Viet Nam Food Association (VFA), said rice prices had been decreasing in the local market because rice exporters could not sign new export contracts.
Despite the continous fall in domestic rice prices over the last two weeks, local experts believe that with increasing demand in the world market, the Asian market will see further sharp price hikes that may see them soar to the highest levels in the last three years.
An executive of the Tien Giang-based Hoang Thuan Trading Co said rice exporters in the Cuu Long (Mekong) Delta bought large volumes of rice in August, waiting to make shipments later this year when a Thai government election campaign pledge to purchase rice from farmers at high prices would force regional rice prices up.
The answers to local farmer's expectations may come soon as Thailand and Viet Nam hold talks on future trade arrangements and the impacts of the Thai government's revival of the crop mortgage scheme in Chiang Mai last Friday become clear.
The high prices pledged in Thailand had increased prices in Viet Nam, and its export volume was expected to reach a 10-year high of 7.5 million tonnes this year, the English-language Bangkok Post newspaper reported in a related story.
Under the Thai government pledge, rice will be procured at 15,000baht (US$495) a tonne for rice paddy and 20,000 baht a tonne for Hom Mali rice, pushing up export prices to more than $800 a tonne from the current $550-560 a tonne.
According to the VFA, Viet Nam exported 127,500 tonnes of rice in the first eight days of September 2011, worth $63.3 million. From January 1 to Sep 8, the country shipped 5.5 million tonnes of rice, earning $2.6 billion.
Viet Nam could produce over 41 million tonnes of paddy this year, up by 2.6 per cent compared with last year. The higher rice production could help Viet Nam ensure exports of 7.5 million tonnes, up 1 million from 2010, the association said.
Overseas opportunities
With the global economy in deep trouble, a number of Vietnamese firms have scaled down their operations at home to keep their capital intact, but many others have been seeking investment opportunities abroad.
After recent fact-finding tours to Brazil and Cuba, Tran Kim Chung, chairman of the CT Group, said these markets offered opportunities for investment in the tourism property sector. In addition to shopping centres in prime locations in big cities in Viet Nam, the group is taking necessary steps to develop a shopping mall in Yangon, Myanmar and a shopping centre selling Vietnamese goods in Osaka, Japan.
Chairman of the local FPT Telecom Group Truong Dinh Anh has unveiled a plan "to export business and management models" to African countries as well as Cuba and North Korea.
In January this year, HCM City-based asset manager VinaCapital announced it would be expanding into Cambodia with investment pledges of $100 million, launching a dedicated fund targeting real estate, insfrastructure, hospitality and agriculture sectors.
VinaCapital made its first investment in Cambodia last year with a $75 million project in the form of a factory that produces sugar, ethanol and power. The firm also opened an office in Cambodia in September 2010. "We've been looking at Cambodia for five years and now think it's the right time to get in," said Don Lam, CEO of VinaCapital during the opening ceremony.
Most recently, the NZ$90 million ($74.4 million) Miraka Milk Powder Plant in New Zealand, in which the Viet Nam Dairy Products Joint Stock Co (Vinamilk) has a 19.3 per cent stake, began operations in August 2011.
The director of the Investment and Trade Promotion Centre in HCM City (ITPC), Tu Minh Thien, said despite the global economic turmoil, a number of Vietnamese firms were looking for business and investment those abroad, including opportunities in the US property market, in the mining and forestry product processing sectors in Laos and in developing shopping malls in Cambodia.
The ITPC has organised fact-finding tours for Vietnamese business delegations to look for opportunities to develop shopping centres selling Vietnamese goods in Vientiane and Yangon.
The Ministry of Planning and Investment said foreign investment from Viet Nam had increased year after year. So far over $2 billion of the registered capital of more than $10 billion for over 600 projects have been disbursed by Vietnamese investors abroad.
Motorbikes sell well
Motorbike manufacturers in Viet Nam remained calm in the face of a plan to restrict and ban motorbikes from entering certain streets in big cities that is to be submitted by the Ministry of Transport to the Government in the fourth quarter of 2011.
Koji Onishi, general director of Honda Viet Nam Co (HVN), said he could not make any comment now as the Government was yet to reveal any roadmap for restricting motorbikes in big cities.
Meanwhile, representatives of other motorbike manufacturers like Piaggio and Yamaha in Viet Nam said they had not prepared any plans in response to recent information published in the local media about future restrictions on motorbikes.
In the first eight months of 2011, Honda sold 1.32 million motorbikes in the local market, a year-on-year increase of 20 per cent.
Onishi said other manufacturers like Yamaha, Suzuki and SYM had also attained "optimistic" growth in sales turnover.
In 2009 and 2010, Ha Noi authorities licensed 10,000 to 15,000 new automobiles and motorbikes per month, with over fourth-fifths of them being motorbikes, and the figure rose to over 20,000 per month in 2011. Ha Noi now has some 3.8 million while HCM City has 4.5 million motorbikes.
In such an "optimistic" situation, the HVN has invested in its third motobike manufacturing plant in Ha Nam Province, aiming to raise its production capacity to 2.5 million motorbikes per year by the end of 2012.
Similarly, Piaggio Viet Nam has announced a further investment of $40 million to its $30 million in registered capital when it was licensed in 2007. The additional investment aims to increase Piaggio's production capacity from the current 100,000 to 300,000 scooters per year.
However, more motorbikes mean bigger traffic problems and higher numbers of residents suffering traffic accidents.
According to figures from the Traffic Police Department, in the first week of the Traffic Safety Month 2011 (September), 35 traffic accidents were reported per day across the country, killing 32 people.
Despite this, a restriction or a ban on motorbikes on streets in big cities would be difficult to implement if the Government does not find alternative, workable solutions to urban transportation problems that affect everyone, particularly the general public. — VNS