Workers load rice packages for export at Sai Gon Port. — VNA/VNS Photo Dinh Hue

HCM CITY (Biz Hub) — Viet Nam exported 1.42 million tonnes of rice for a total free-on-board value of US$577.28 million in the first quarter, a year-on-year increase of 57.7 per cent in volume and 51.16 per cent in value, according to the Viet Nam Food Association.

Many of last year's contracts were executed this year, especially Government-to-Government contracts with Indonesia and the Philippines, and commercial contracts with China pushed up the exports, the VFA said.

Asian countries were the main buyers, buying 76.12 per cent of the exports, followed by the Americas with 10.94 per cent and Africa with 9.76 per cent.

Common white rice accounted for 29.31 per cent, up 135.44 per cent from the same period last year due to high demand from Indonesia and the Philippines.

Exports of high-value white rice and fragrant rice accounted for 21.96 per cent and 21.89 per cent respectively thanks to high demand from Cuba, Indonesia, Africa, and China.

Shipments of glutinous rice surged by 200.16 per cent due to an increase in demand from China. But broken rice exports were down by 64.76 per cent.

The association said the number of contracts to be executed in the next few months, excluding new contracts, remains high, with around 1.4 million tonnes to be shipped.

Export prices have increased significantly in recent months, especially since March.

Meanwhile, high demand from exporters and falling output in the Cuu Long (Mekong) Delta because of drought and saltwater intrusion have pushed up domestic prices of the grain.

As a result, Viet Nam's export prices are higher than those of other Asian suppliers, causing the country to lose its advantage in the competitive global market.

The association quoted the US Department of Agriculture as saying world output in 2015-16 declined by 1.6 per cent to 471 million tonnes, a second straight year of decline.

El Nino was a major factor, causing smaller crops in many rice producing countries.

Global consumption will meanwhile rise by 0.3 per cent to 484.2 million tonnes, making it the third consecutive year when consumption will exceed production, leading to a depletion of stockpiles.

The USDA expects China's rice imports this year to equal that of last year at around five million tonnes. In the first quarter China was the biggest buyer of Vietnamese rice.

The association is concerned that China may shift to buying rice from other regional countries due to rising prices in Viet Nam.

The VFA expects exports to reach 3.01 million tonnes in the first half, a year-on-year increase of 12 per cent. — VNS