Rice stockpiles in Vietnam drop on record exports, group says

Rice stockpiles in Vietnam, the world’s second-largest exporter, were 41 percent lower at the end of 2010 compared with a year earlier after record overseas shipments, according to the Vietnam Food Association.

End-of-year inventories totaled 850,000 metric tons, down from 1.45 million at the end of 2009, Huynh Minh Hue, general- secretary of the association, wrote in an e-mail in response to questions from Bloomberg News. Lower stockpiles contributed to a forecast for a drop in exports in 2011, Hue said.

The country has targeted shipments of about 6 million tons this year, Deputy Agriculture Minister Diep Kinh Tan told Bloomberg on Jan. 4. That compares with exports of 6.75 million tons in 2010, according to data from the association, which represents food producers, processors and traders.

Vietnam competes against Thailand, the largest shipper, in the global rice market, with the Philippines leading overseas purchases. The Thai benchmark price for 100 percent grade-B rice has risen 19 percent from last year’s low to $544 a ton on Jan. 12. The association’s members are responsible for more than 98 percent of the nation’s food exports, according to its website.

Paddy production may be 39 million to 40 million tons in 2011, little changed from 2010′s output, amid doubts over the climate, Hue said by phone. “Maybe some drought, maybe more rain — we don’t know,” Hue said.

Vietnam’s rice output was estimated at 40 million tons in 2010, 2.7 percent higher than 2009, due to higher yields and an expansion in the cultivated area, the government’s statistics agency said on Dec. 30.

Water Use

Water use on farms in the Mekong and northern deltas may have to be rationed as a result of possible droughts, the Vietnam News reported last month, citing Prime Minister Nguyen Tan Dung. Water levels on the Hong and Thai Binh rivers in the north were much lower than usual, the newspaper reported.

The 2011 export target will be reviewed after monitoring of the weather during the winter-spring crop, Deputy Agriculture Minister Tan said Jan. 4. Concerns over a possible drought led the ministry to be “cautious” when making the initial estimate.

Output from this year’s winter-spring harvest is estimated at 19.2 million tons, up 2.8 percent from the previous year, the General Statistics Office in Hanoi said in last month’s report.

Collection of the winter-spring crop has started in some of the southernmost provinces, with the bulk of the harvest expected between March and April, Hue said by phone.

Vietnamese farmers planted 7.51 million hectares of rice in 2010, 1 percent more than 2009, according to the General Statistics Office. Yields rose by 80 kilograms per hectare to 5.32 tons per hectare.

Vietnam plans to ship 61 percent of rice exports this year to Asian countries and 29 percent to Africa, the Vietnam News reported on Jan. 13, citing the food association. – Business Week

Tags: Vietnam rice, Vietnam rice exports