Loc Troi Group, a leading agricultural services and food corporation in Vietnam, has secured new export contracts to fulfil until this November, says CEO Nguyen Duy Thuan.
“Loc Troi always prepares for market fluctuations and has enough rice in stock to serve orders. At this point, we have 200,000 tons of rice in inventory and continue to buy the grain from farmers for our business,” he told The Investor Saturday.
India, Thailand and Vietnam are the world’s three largest rice exporters, respectively. India last month ordered a halt to its largest rice export category to calm domestic prices, which climbed to multi-year highs in recent weeks as erratic weather threatened production. Besides, the Black Sea grain deal has also collapsed.
The Food and Agriculture Organization’s (FAO) All Rice Price Index, which tracks prices in key exporting countries, averaged 129.7 points in July against 126.2 points for the previous month, the UN agency said Friday.
This index rose 2.8% in July from a month earlier to their highest level in nearly 12 years as prices in key exporting countries jumped on strong demand and India’s move to curb the exports, the FAO said, adding that the July score was almost 20% higher than the last year’s 108.4 points and the highest since September 2011.
Following India’s export ban, the export price of Vietnam’s 5% broken rice has risen from $535 to $602 per ton; and that of its Jasmine rice from $625 to $690 per ton as of August 4, Minister of Industry and Trade
Nguyen Hong Dien said at a Friday conference in the Mekong Delta city of Can Tho.
The conference discussed the management of rice exports for the remaining months of the year.
Loc Troi, a leading rice exporter in the country, has to date signed contracts with Vietnamese rice growers to purchase the staple progressively until mid-November, CEO Thuan said.
Despite current increases in the price of unmilled rice in Vietnam’s rice bowl, the Mekong Delta, Loc Troi is not affected because it had signed purchase contracts earlier with farmers, he added.
“Now, our daily spending for rice purchases averages VND50-70 billion ($2.1-2.95 million). It will continue like that throughout this autumn-winter crop until November.”
Increasing prices in the world market and having enough rice in stock for export will help the firm earn good profits this year, he said.
Thuan had told The Investor in February that his corporation was focused on high-end export markets, based on its “order first, process next”
This means that its export quality features are based on specific requirements of each market. Loc Troi takes orders for a whole year first and then streamlines supply accordingly.
At Friday’s conference in Can Tho, Minister Dien said Vietnam expected to ship 7.5 million tons of rice this year while ensuring national food security.
Rice exports in the first seven months is estimated at about 4.83-4.84 million tons, therefore the volume in the last five months is forecast at 2.66-2.67 million tons, Tran Duy Dong, head of the trade ministry’s Import-Export Department, said at the conference.
Vietnam exported 7.1 million tons of rice last year, according to government data.