VietNamNet Bridge – More merchants from the north are buying rice from southern provinces as China’s demand for rice increases.

“The rice price has increased to VND7,000 per kilo from VND6,700 per kilo last week,” one exporter said, explaining that the price had been escalating as more and more merchants were looking to buy rice.

“Rice exporters fear that if the situation lasts for a long time, they may not be able to collect enough rice to fulfill their export contracts,” he said.

An Giang province, Thot Not District, in Can Tho City and Lap Vo District in Dong Thap provinces, has the most bustling rice markets in the south.

Dozens of ships reportedly dock at the Hau River section near the My Thoi Port in An Giang province, waiting to get rice deliveries.

The rice will be shipped to the north, from which it will go across the border gate to China.

TVT, the owner of a rice husking workshop in Thot Not district, said the rice trade seems to be “abnormal” this year.

“The summer-autumn crop has just begun. The supply remains abundant. However, merchants are still trying to collect rice in a hurry,” he noted.

“Merchants from northern provinces and Chinese come to our stocks to buy rice. They buy as much as we can provide, and at high prices. Meanwhile, they do not care much about the quality, the rice variety and humidity,” T noted.

“All the husking workshops in the locality are running at full capacity, but merchants still have to wait for deliveries,” he added.

Le Van Liet, a Vietnamese merchant in Thoi Lai district of Can Tho City, who specializes in collecting rice from farmers for export companies, who export rice under official contracts, admitted that the Chinese were willing to pay higher prices and set lower requirements.

“They (Chinese merchants and Vietnamese merchants from the north) pay VND11,000 for every kilo of five percent broken rice. Meanwhile, the average market price is just VND9,500 per kilo,” Liet said.

As such, export companies now have to compete with northern merchants in collecting rice for export.

The owner of a big rice trade enterprise in Lap Vo district of Dong Thap province said the companies exporting rice through official channels are worried because rice material prices keep increasing day by day.

“The rice price has increased to VND7,000 per kilo from VND6,700 per kilo last week,” he said, explaining that the price has been escalating as more and more merchants seek to purchase rice.

“Rice exporters fear that if the situation lasts for a long time, they may not be able to collect enough rice to fulfill the signed export contracts,” he said.

Vietnam’s rice is exported either through unofficial channels to China (rice is carried across the border gate to be sold directly to Chinese) and through official channels under official contracts.

According to Vo Tong Xuan, the leading rice expert, the high demand from China has pushed the rice price up and brought higher profits to farmers. However, he warned that it is risky to do trade with Chinese.

“They (Chinese) live from hand to mouth. Therefore, there always exist high risk in payment when doing business with them,” he said.

DNSG