Vietnamese rice exports unlikely to suffer from Thailand’s massive stockpile sale

Thailand’s plan to sell off the 11.4 million tons of rice it has stockpiled this year will only affect the prices of Vietnam’s low-quality rice exports.

The Thai government announced on April 25 that it will sell 11.4 million tons of stockpiled rice in May and June for a targeted Baht100 billion ($2.81 billion). This is the biggest stockpile sale in the history of the world’s second largest rice exporter, and higher than the target of nine million tons set for this year.

Chairman of the Vietnam Food Association Huynh The Nang said that the majority of Thailand’s inventory is low-quality rice, so Vietnam’s rice exports are unlikely to suffer.

The chairman added that Vietnam still has 1.4 million tons of rice waiting to be delivered under existing contracts, not to mention new deals.

Rice expert Vu Tong Xuan agreed with Nang, adding that it may be difficult for Thailand to sell off its rice inventory. In 2008, Thailand tried to clear eight million tons of old rice but was unable to do so.

“The Thai government will struggle to sell 11.4 million tons of rice as only traders in Africa, Indonesia and the Philippines are willing to buy these low-grade products. Even when they decide to purchase, the volume will be modest, maybe one million tons,” Xuan said.

“Most Vietnamese rice exports are newly-harvested products, so the sale will have little impact on our export prices.”

A rice export firm told VnExpress that despite Thailand’s upcoming plan, their orders from foreign markets remain stable, and enterprises from China, Japan and the U.S. are still agreeing to pay more for fresh produce.

This year, Vietnam has set a target of exporting 6.5 million tons of rice. The country exported 2 million tons of rice in the first four months, an on-year increase of 8.5 percent, according to Vietnam Customs.

By Thi Ha, Bach Duong / VnExpress