Weaker yuan presses Vietnam’s rice price down
As predicted, importers have tried to lower Vietnam’s rice price after the Chinese government’s devaluation of the yuan.
VnExpress quoted the Vietnam Food Association (VFA) as reporting that the rice price and sales may fall significantly because of the yuan depreciation.
Chinese enterprises, which have to pay 4 percent more for rice import contracts with the payments in US dollars, are trying to force the price down to offset the loss they incur due to yuan depreciation.
This coincides with Reuters’ prediction made in mid-August that Vietnam’s rice export price would decrease on the yuan and dong devaluation and the abundant supply.
VFA then announced the lower floor export price of $330 per ton, a 2.9 percent decrease, for 25 percent broken rice.
The decision was released in the context of the sharp fall of 8.8 percent decrease in exports in the first seven months of the year.
Le Thanh Danh from Vinafood 1 confirmed that Chinese have asked to renegotiate the prices, reasoning the yuan devaluation, which has made Vietnamese exporters suffer.
Danh said on Nong Nghiep that Vietnam now bears pressure as India and Pakistan are offering rice at relatively low prices.
Therefore, Vietnam’s exports to China have seen the price decrease significantly to $340 per ton of 5 percent broken rice and $330 per ton of 15 percent broken rice. The price levels represent a $7-8 per ton decrease compared with some months ago.
The price of rice exported through unofficial channels – across the border gates – has also fallen. Every kilo of rice sold across the northern border has seen the price fall by VND300.
Some businesses in the Mekong River Delta estimated that over 1 million tons of rice have been exported to China this year across the border.
Nguyen Van Don, director of Viet Hung Rice Export Company, warned that Chinese importers may cut the volume of rice to buy from Vietnam and buy from Thailand and Myanmar instead.
As the export price decreases, the rice price in the domestic market has also gone down. VFA said the price of 5 percent broken rice in Mekong River Delta has decreased by VND100 per kilo over the week before.
Analysts warned that not only rice but other farm produce will also suffer from the weaker yuan, because China is a big consumer of Vietnamese produce.
China alone consumed 38.1 percent of Vietnam’s 3.72 million tons of rice exports so far.
It consumes 25 percent of Vietnam’s rubber and 13 percent of Vietnam’s cashew nut output. The country consumed 90 percent of 2.89 million tons of cassava sold in the last seven months of the year.
Chinese enterprises, which have to pay 4 percent more for rice import contracts with the payments in US dollars, are trying to force the price down to offset the loss they incur due to yuan depreciation.
This coincides with Reuters’ prediction made in mid-August that Vietnam’s rice export price would decrease on the yuan and dong devaluation and the abundant supply.
VFA then announced the lower floor export price of $330 per ton, a 2.9 percent decrease, for 25 percent broken rice.
The decision was released in the context of the sharp fall of 8.8 percent decrease in exports in the first seven months of the year.
Le Thanh Danh from Vinafood 1 confirmed that Chinese have asked to renegotiate the prices, reasoning the yuan devaluation, which has made Vietnamese exporters suffer.
Danh said on Nong Nghiep that Vietnam now bears pressure as India and Pakistan are offering rice at relatively low prices.
Therefore, Vietnam’s exports to China have seen the price decrease significantly to $340 per ton of 5 percent broken rice and $330 per ton of 15 percent broken rice. The price levels represent a $7-8 per ton decrease compared with some months ago.
The price of rice exported through unofficial channels – across the border gates – has also fallen. Every kilo of rice sold across the northern border has seen the price fall by VND300.
Some businesses in the Mekong River Delta estimated that over 1 million tons of rice have been exported to China this year across the border.
Nguyen Van Don, director of Viet Hung Rice Export Company, warned that Chinese importers may cut the volume of rice to buy from Vietnam and buy from Thailand and Myanmar instead.
As the export price decreases, the rice price in the domestic market has also gone down. VFA said the price of 5 percent broken rice in Mekong River Delta has decreased by VND100 per kilo over the week before.
Analysts warned that not only rice but other farm produce will also suffer from the weaker yuan, because China is a big consumer of Vietnamese produce.
China alone consumed 38.1 percent of Vietnam’s 3.72 million tons of rice exports so far.
It consumes 25 percent of Vietnam’s rubber and 13 percent of Vietnam’s cashew nut output. The country consumed 90 percent of 2.89 million tons of cassava sold in the last seven months of the year.