Rice Exports Ride Difficult Int’l Conditions

Vietnam’s rice production in 2010 is predicted to total about 39 million tonnes (VEN) - The Ministry of Industry and Trade and the Vietnam Food Association recently held a press conference to announce the results of the first nine months of 2010's rice exports and the plan for the rest of the year.   Deputy Minister of Industry and Trade Nguyen Thanh Bien said that the Government had not set any hard targets for rice exports in 2010 and the management of rice export could be flexible so that farmers can sell their products and the domestic rice market can remain stable. Concerned ministries, departments, localities, the Vietnam Food Association and rice exporters have had to keep a close watch on the production situation, as well as changes in supply and demand on the domestic and international markets. Forecasting must be improved and coordination between concerned organizations in dealing with market changes must be intensified. Commenting on rice exports in the year so far, Truong Thanh Phong, the president of the Vietnam Food Association, said that there had been complicated, hard-to-predict market changes. Some traditional importers of Vietnamese rice such as the Philippines and Indonesia did not show any sign of the demand for rice while the orders received from African importers, especially West African customers, were small. Importers not only wanted to buy Vietnamese rice at low prices but also required Vietnamese rice to meet strict standards. For these reasons, Vietnam could not export rice at high prices. In such circumstances, Vietnam had flexibly managed rice exports to increase volume. In late June, the Government promulgated Decision 993/QD-TTg regarding the purchase of one million tonnes of summer-autumn rice for temporary reserve. At the same time, rice businesses intensified negotiations to sign export contracts for major volumes. In late July, domestic rice prices increased strongly due to the effect of the governmental decision to buy rice for temporary reserve, the export of rice via border-trade channels, and natural disasters in countries that are large producers/consumers/exporters of food products such as China, Thailand, Pakistan, Russia and some West European countries. When domestic rice prices increased, the Vietnam Food Association's instructions were to maintain the floor export price unchanged in order to slow down the signing of export contracts. Therefore, the export price of Vietnamese rice was equal to that of Thai rice. From the beginning of 2010 to September 15, Vietnam exported more than five million tonnes of rice with FOB (Free-on-Board) value of US$2.14 billion, up 5.86 percent in terms of volume and 10.19 percent in terms of FOB value compared with the same time of 2009). Vietnamese rice has been exported not only to traditional markets but also some new markets. The demand for Vietnamese rice on the international market is very high. Vietnamese rice continues to attract traditional importers such as Malaysia, Indonesia, Cuba and Iraq. It has been firmly positioned on the African market which is the largest consumer of Vietnamese commercial rice. Despite natural disasters and epidemics, the Ministry of Agriculture and Rural Development predicted that the output of Vietnamese rice in 2010 could total about 39 million tonnes (the rice output of the Cuu Long (Mekong) Delta alone is forecasted to reach about 21 million tonnes, up 400,000 tonnes compared with 2009)./.