Rice producers in the Mekong Delta are becoming agitated by the lack of government guidance on this year’s plans for rice exports.

The Ministry of Industry and Trade may soon issue a “temporary” export plan, according to the Vietnam Food Association (Vietfood)’s most recent meeting.

And all the while, rice prices are increasing.

As early as last October at the International Rice Conference in Bali, Indonesia, experts predicted rice prices would go up.

And so did Vietnam’s leading rice expert, former An Giang University president Vo Tong Xuan.

Xuan said with wheat prices tripling due to poor harvests and corn prices doubling because of increasing demand, more and more consumers would switch to rice, increasing demand even further.

In the meantime, the world’s rice supply is decreasing.

To offset its wheat and corn shortages, India, a major rice exporter, has decided to reduce exports of rice and increase imports of the grain.

To discourage rice exports, the Indian Ministry of Agriculture recently raised its minimum export price to US$500 a ton.

And to reign in rising rice prices in its domestic market, Indonesia plans to cut tariffs on rice imports by 18 percent.

With an increasing demand and decreasing supply, Vietfood predicts the export price of long-grain white rice will rise to more than $350 per ton this year.

On the domestic market, rice prices are also climbing.

Early last week, input rice prices in the Mekong Delta surged to between VND3,550 and VND3,600 per kilo-gram, a VND100 increase within just a few days.

Export prices have also gone up by between VND100 and VND150 to between VND5,360 and VND5,600 per kilogram.

Le Viet Hai, president of Can Tho-based rice exporter Mekong Company, advises other exporters to exercise caution.

“With prices likely to climb higher, it’s wiser to sign short-term contracts,” he said.

Last year, despite a high export price level of $295, some rice exporters suffered losses because costs, as well as rice export prices, shot up after they signed contracts with foreign importers.

Hai said domestic exporters should bide their time and wait until summer to export.

Yet, as early as the end of 2007, Vietnam exporters signed three-month contracts to supply 410,000 metric tons of long grain white rice to the Philippines at $408.90 to 410.99 per ton.

A rice exporter, who didn’t want to be named, said this level was not necessarily “profitable” to Vietnamese exporters considering rice prices and fuel costs were likely to increase.

“Exporters from Thailand also took part in the Philippines National Food Authority’s bidding,” he said.

“Why didn’t they try harder to win the contracts?”

Some rice exporters remember how Thailand outwitted Vietnam last year.

Vietnamese exporters impatiently signed contracts to export 3 million tons at the beginning of April when rice prices seemed at an all time high, at $291 per ton.

Their counterparts in Thailand waited until December when prices surged to $355 per ton.

At the end of the year, the two countries’ final accounts showed who had won the game: Thailand garnered $3.7 billion for a total export amount of 9.5 mil-lion tons while Vietnam exported half of that amount of rice for only $1.4 billion.

So many rice exporters are waiting for a sign from rice authorities now.

Vo Tong Xuan wonders why the government has not at least decided to expand cultivation for the upcoming winter-spring crop.

“Farmers should have been instructed to increase high-yield rice cultivation this season by now,” Xuan said.

The Ministry of Agriculture and Rural Development does have a plan, though.

According to its existing guideline, the area of rice cultivation in the Mekong Delta will be reduced by 50,000 hectares to only 1.5 million hectares this season.

Source: TBKTSG