Loc Troi JSC, a leading agricultural services and food corporation in Vietnam, will export rice to Indonesia and Malaysia in a new move amidst rising prices in key exporting countries.
Prices have jumped as a result of strong demand and India, the world’s leading rice exporter, curbing exports of the staple.
The firm’s board of directors has approved plans to purchase rice in Vietnam for making shipments to the two Southeast Asian markets this year, according to a Monday regulatory filing with the Hanoi Stock Exchange (HNX).
Loc Troi is listed as LTG on the HNX’s Unlisted Public Companies Market (UPCoM).
Each transaction, for either purchase or exports, will have a maximum value of $127 million, the filing said. It did not say if the company has signed contracts for rice shipments to Indonesia and Malaysia, nor did it mention shipment volumes.
Loc Troi CEO Nguyen Duy Thuan has been assigned to represent the company in signing purchase contracts with domestic suppliers and farmers.
He told The Investor Saturday that Loc Troi had secured new export contracts to fulfil until this November. “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 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, Thuan added.
“Increasing prices in the world market and having enough rice in stock for export will help the firm earn good profits this year.”
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 on August 4.
This index rose 2.8% in July from a month earlier to its highest level in nearly 12 years as prices in key exporting countries jumped on strong demand and India’s move to curb rice exports, the FAO said, adding that the July score was almost 20% higher than last year’s 108.4 points and the highest since September 2011.
India, Thailand and Vietnam are the world’s three largest rice exporters, respectively. The export price of Vietnam’s 5% broken rice on Monday was $618 per ton, while those of Thailand and India were $631 and $493, respectively, according to the Vietnam Food Association.
Vietnam exported 7.1 million tons of rice last year, according to government data. The expected figure for this year is 7.5 million tons, trade minister Nguyen Hong Dien said at a national conference on rice in the Mekong Delta city of Can Tho last Friday.