Rice, rubber to boost Vietnam economy this year

Southeast Asia’s booming economy, Vietnam said the country’s economy is to get a boost from the more than expected agri outputs this year.

Vietnam Agriculture ministry said it was upbeat about agricultural exports this year despite unfavorable weather conditions and increasing input costs, saying that rice, seafood, coffee and rubber would help increase the country’s agricultural exports.

The Ministry increased its export forecasts for several key agricultural staples in its latest market report.

After last year’s bumper rice crop of nearly 6.9 million tons, the ministry has increased its annual target of exporting 5.5-6.1 million tons of rice set earlier this year to 7.1-7.4 million tons.

Chairman of the Vietnam Food Association said that rice exporters were close to their Q2 target of 2 million tons.

The country in the first quarter exported more than 1.8 million tons of rice worth $884 million, up 42 percent and 46 percent in volume and value compared with the same period last year.

With regards to seafood, the report forecast that exports would reach $5.7-5.8 billion this year, $200 million higher than previously anticipated in December. Tra fish alone could earn the country up to $2 billion, up $300 million compared with December’s forecast, the ministry said.

“A further rebound of the world’s seafood consumption and the increasing cost of foodstuffs would contribute to boosting seafood exports for the rest of the year,” the report stated.

It said that this year’s coffee exports could reach more than 1.2 million tons worth roughly $2.6 billion, up 40.5 percent in value over last year.

Vietnam Coffee and Cocoa Association was also optimistic about this year’s coffee exports, due to the fact prices hit a record high in March and were forecast to remain high due to limited supply.

The International Coffee Organization forecast the global coffee yield from the 2010-11 crop would be up 8.6 percent over the previous crop, however, reserves had dropped sharply by 33 percent, draining coffee supplies to an 11-year low.

The ICO forecast that Vietnam’s coffee yield from this year’s crop would be 18.4 million bags, up 1.3 percent over the previous crop.

Low production in the world’s major coffee producers, including Brazil and Columbia, coupled with strong demand from India, Japan and China, had pushed coffee prices to nearly $3 per pound in early March for the first time in 14 years.

In the domestic market, coffee reached $2,300 per ton on the back of the global activity. VCCA said if coffee prices remained high for the rest of the year, the industry could expect to fetch $2.6 billion from exports.

In the report, the ministry also expected rubber exports to reach $3 billion this year if demand remained unchanged from the world’s major importers, including China and Malaysia. Last year, the rubber industry earned nearly $2.4 billion from exports.

According to the Association of Natural Rubber Producing Countries, rubber prices had decreased since early March due to China’s attempts to curb inflation and the earthquake in Japan that had halted operations at automobile manufacturers.

Tags: Vietnam economic, Vietnam economic growth, Vietnam economy, Vietnam economy 2011