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Home News Vietnam will surpass Thailand as number 1 rice exporter

Vietnam will surpass Thailand as number 1 rice exporter

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BUSINESS IN BRIEF 16/5
13:39' 16/05/2009 (GMT+7)

 
Vietnam, Thailand cooperate in rice production, exports

Prime Minister Nguyen Tan Dung on May 15 welcomed the signing of cooperation agreements on rice production, processing and exports between Vietnam and Thailand while receiving Thai Commerce Minister Porntiva Nakasai in Hanoi on May 15.

Mr Dung said that the signing of the agreements between the Vietnamese Ministry of Industry and Trade and the Thai Ministry of Commerce the same day will help bring practical benefit to both countries.

He proposed that the two ministries regularly share experiences and effectively implement their signed agreements, especially those on rice exports, trade promotion and market management.

For her part, Porntiva Nakasai briefed PM Dung on the results of her working session with the Vietnamese Ministry of Industry and Trade, and pledged to realise the agreements signed with the Vietnamese side.  

She noted that trade ties between the two countries have grown and flourished in recent years, reaching US$6.2 billion in 2008, up 31 percent against 2007.

Promoting trade, investment and tourism in Mekong River Delta

A conference on promoting trade, investment and tourism in the Mekong River Delta was held in An Giang province on May 15.

Present at the conference were representatives of ministries, departments and businesses in the Mekong River Delta region and the South Western region, and the Overseas Vietnamese Association of Cambodia.

Delegates discussed cooperation programmes in the Mekong River Delta from now until 2010, including organising “Mekong River Delta’s Days” in Ho Chi Minh City in January 2010 and an international farm produce fair. Regional provinces will conduct fact-finding tours to explore tourism potential in the Mekong Delta, establish a joint stock company to buy and distribute farm produce from the region and issue publications introducing the delta’s investment potential and opportunities as well as trade promotion activities in the Cambodian market.

The conference is the first event within the framework of the Mekong Delta Economic Cooperation-An Giang Forum 2009.

HCM City hosts 2009 Vietnam Brand Week

The “2009 Vietnam Brand Week” exhibition and trade fair will be held in HCM City from May 15-18.

This is just one of the spin off from “Vietnam Trademark Day” (April 20) sponsored by the Ministry of Industry and Trade to help Vietnamese enterprises introduce and promote their brands in the local market while improving their competitive edge during the international integration process.

On display at nearly 300 pavilions at the fair were products and services from 130 domestic businesses including 30, which won the “National Trademark” title, and nearly 100 that won the “Strong Trademark 2009” title.

Many seminars, meetings, art performances, and fashion shows will also be held during the fair.

Lao goods enjoy preferential tariff

The Ministry of Industry and Trade (MoIT) has issued a circular stipulating that several commodities imported from Laos, including husked and unhusked rice of all kinds and tobacco leaves and stems will enjoy a preferential tariff rate of zero.

The circular specifies that Vietnamese traders will be allowed to import rice of all kinds from their neighbours in Laos as part of their quotas.

For tobacco leaves and stems, only traders that have received licences from the MoIT to import tobacco materials will be permitted to trade with their counterparts across the border.

The document also points out that imported goods must have certificates of origin (C/O), form S, issued by authorized Lao agencies.

Issued on February 20 to replace the previous one, the new circular will take effect 45 days after its signing and cease to be effective after December 31, 2009.

Trade fair offers many opportunities in Cambodia

An investment, tourism and trade fair is currently underway at the Tinh Bien International Border Gate in the Mekong delta province of An Giang, attracting a large number of Cambodian businesses.

At the opening of the fair on May 14, Deputy Minister of Industry and Trade Nguyen Thanh Bien said that the event along with a number of trade promotions, aims to help Vietnamese businesses increase their market share in Cambodia.

He expressed his hope that the fair running till May 19 will assist businesses in the Mekong delta to connect with neighbouring areas, especially Ho Chi Minh City, to stimulate the region’s development.

More than 200 Vietnamese and Cambodian businesses are exhibiting their products in 500 pavilions, with goods ranging from farm products, seafood, machinery, chemicals, construction materials and consumer items to furniture and handicrafts.

Taking part in the fair are businesses, coming from the Mekong delta and also from the Central Highlands and Ho Chi Minh City.

Home to several international and national border crossings, An Giang is a gateway for farmers from the Mekong delta to reach other markets in the region and promises to become a busy trade zone in the future.

Polyester fibre project goes ahead

A polyester fibre plant will be built in Hai Phong City’s Dinh Vu industrial zone under a US$250 million EPC (Engineering, Procurement and Construction) contract signed in Hanoi on May 14.

The deal was reached by the PetroVietnam-Vinatex Dinh Vu Joint Stock Company (PVTex), the project’s investor and several contractors including the Huyndai Engineering Company, LG International Corp and the Oil and Gas Construction Joint-Stock Company.

It will take 25 months to construct the plant, which comprises several workshops and pipelines to transfer liquid Mono Ethylene Glycol (MEG) from the wharf in Dinh Vu industrial zone straight to the plant.

The contract also covers the supply of spare parts and materials maintenance, plus training for the plant’s technicians in its first years of operation.

The Dinh Vu project has a design capacity of nearly 500 tonnes of fibre a day.

Pepper exports to rake in US$142.5 million in six months

Vietnam expects to export 54,500 tonnes of pepper in the first half of this year to earn US$142.5 million, an increase of 15.75 percent in volume but a drop of 14.5 percent in value, reported the Vietnam Pepper Association (VPA).

Domestic pepper prices are fluctuating between VND30,000-33,000  per kilo due to the industry’s gloomy outlook,  said VPA. Experts recommend local businesses not export a large quantity of pepper at this time to avoid losses.

Vietnam plans to export 100,000 tonnes of pepper this year, which accounts for 50-60 percent of the world’s market share, according to VPA.

This total volume includes 85,000-87,000 tonnes expected to come from this year’s harvest and the rest sourced from last year’s stockpiles.

Last year, the country shipped more than 89,700 tonnes of pepper abroad, fetching US$309 million, up 7.6 percent in volume and 12.4 percent in value over the previous year.

Government to auction VND2 trillion worth of bonds

The Hanoi Securities Trading Centre (HaSTC) has announced that Government bonds worth VND2 trillion in total will be offered for auction at the centre on May 20.

The auction will combine competitive and non-competitive bids with the total bonds for non-competitive bidding, which does not exceed 30 percent of the total bonds for auction.

The bonds will be sold at their face value in the form of book entry and be listed on the HaSTC.

Farmers to learn modern agricultural techniques in Israel

The Overseas Labour Employment, Services and Construction Joint-Stock Company (Oleco) has sent 50 farmers to Israel for an 11-month training course in high-tech agricultural and large-scale farm management skills.

The trainees will be equipped with theories on leading global agricultural methods and complete placements on large agricultural estates to learn practical skills, said Oleco Director Le Xuan Luyen.

They will also be able to earn between US$750-850 a month from the placements by working extra hours.

Oleco is recruiting an additional 200 farmers to send to the Middle-Eastern country by the end of this year as part of a programme of cooperation between the Ministry of Agriculture and Rural Development and its Israeli counterpart.

NGOs grant nearly US$2 million to port city Hai Phong

Ten non-governmental organisations (NGOs) from seven countries have agreed to put up nearly US$2 million for the northern port city of Hai Phong.

Their commitments were made during a meeting between the city’s People’s Committee and more than 40 international donors and NGOs on May 13.

At the meeting, the local authorities listed eight major fields which need foreign assistance including agro-forestry-fishery, healthcare, education and vocational training, environmental protection, and science-technology.

Hai Phong has established relations with about 100 foreign NGOs, which have poured tens of million of dollars into the city’s 304 projects on health care, agriculture and rural development, education and vocational training, and humanitarian programmes over the past four years.

In 2008 alone, they spent US$13 million on 98 projects.

Rice exports hit record high in first four months

By mid May, businesses throughout the country had signed contracts to export 4 million tonnes of rice, of which, 2.3 million tonnes has already been shipped to overseas partners, according to the Vietnam Food Association.

With an yearly export target of somewhere 4.5-5 million tonnes for this year, within less than five months, 88 percent of the target has been fulfilled in terms of the signed contracts and 55 percent in terms of the volume of rice exported.

In April alone, Vietnam’s rice exports hit 700,000 tonnes, the highest level since the country started to export rice, up by 26.8 percent over the same month last year.

However, economic experts say that in the face of the current high rate of rice exports, State management agencies and businesses should work more closely together to avoid losses, which would affect national food security.

New power station connected to national grid

Turbine No.1 at the Plei Krong Hydroelectric Power Plant, with a capacity of 50 MW, is expected to commence generating electricity for the national grid on May 24.

On May 12, the turbine was successfully connected to the national grid, said the project management board.

Once running at full capacity, the turbine will supply 1.2 million kWh each day, helping to ease the country’s power shortages, particularly during the dry season.

The 100MW power plant, which is built on the Krong Poko River in the Central Highlands province of Kon Tum, is estimated to have cost VND3 trillion (roughly US$171.5 million) and was funded by the Electricity of Vietnam Group (EVN).

Turbine No. 2, which has the same capacity to produce 50 MW of electricity is now under construction.

EVN added that the 140 MW turbine No.1 at the Buon Kuop hydroelectric power plant began to generate electricity on May 12, after a month of trial run.

The Buon Kuop power plant, which has a total capacity of 280 MW, is being built in the Central Highlands province of Dak Lak, with a cost of VND4.61 trillion (US$263.5 million).

When it becomes fully operational, the plant, the second largest of its kind in the Central Highlands after the Yaly project, will annually supply up to 1.4 billion kWh to the national grid.

Qatar agrees to Vietnam’s Trade Centre project

Qatari Prime Minister Hamad bin Jassim bin Jabor Al-thani has pledged to provide land so that Vietnam can build an exhibition and trade centre in the Gulf State, adding Qatar will open an embassy in Hanoi later this year to strengthen bilateral ties.

The Qatari PM received a delegation from the Ministry of Construction, led by Minister Nguyen Hong Quan, during their visit to Qatar from May 9-12 as the guests of the Qatari Minister of Municipality and State Planning Abdulaziz Al-Thani. He said that Qatari agencies are fulfilling agreements reached by the two countries during PM Minister Nguyen Tan Dung’s official visit to Qatar in March.

The PM praised the level of Qatari-Vietnamese cooperation in construction projects and commended Vietnamese construction companies’ bidding for major infrastructure projects in Qatar.

He said Qatar will soon send a delegation to Vietnam to finalise a cooperative project to grow rice and flowers.

During his stay in Qatar, Minister Quan attended the Vietnam-Qatar business forum, jointly organised by the Vietnamese embassy and the Qatar Chamber of Commerce and Industry.

Earlier from May 5-9, Minister Quan, accompanied by representatives from 12 leading Vietnamese businesses in the construction and mechanical engineering industries, visited the United Arab Emirates (UAE) to seek out opportunities for cooperation in housing and civil engineering projects in the Emirates.

Malaysian group to build power station in Hai Duong

The Jaks Resources Group from Malaysia will invest US$2 billion in building a thermal power plant in northern Hai Duong province.

A Memorandum of Understanding was signed between representatives of the Ministry of Industry and Trade (MoIT) and the Jaks Group in Hanoi on May 13.

Accordingly, construction of the thermal power plant in Kinh Mon district will start in October 2010.

The plant, which will be built under a Build-Operate-Transfer (BOT) contract, is expected to generate power by early 2014 with an annual output of 7.8 billion kWh.

The President of Jaks Resources, Andy Ang, said that building a thermal power plant was an important project for the group. He also spoke highly of Vietnam’s policy to attract foreign investors.

The head of the MoIT’s BOT projects department, Pham Hung, pledged to support the investor in carrying out the project.

HCMC trade promotion office to open in Japan

Ho Chi Minh City’s People’s Committee has given the green light to the establishment of its trade promotion office in Yokohama, Japan next month, Vice Chairwoman Nguyen Thi Hong said on April 16.

The Saigon Trading Group (Satra) will be responsible for market information updates and implementing the city’s trade promotion and tourism activities in Japan, she said.

The office also aims to develop the economic and trade partnership between HCMC and Japanese friendship cities such as Yokohama, Osaka and Hyogo.

Savills opens real estate trading floor in Hanoi

UK-based real estate service provider Savills Vietnam opened a property trading floor Wednesday in Hanoi, a company spokeswoman said.

It had received a license last month from the Ministry of Planning and Investment, becoming the first foreign-owned firm to receive a nationwide license, the company said.

Savills Vietnam, which has been operating since 1995, was appointed last month by the Phu My Hung Corporation as its sole leasing and management agent for the US$400 million The Crescent in Ho Chi Minh City’s District 7.

Businesses switch to online marketing

With businesses switching to Internet-based marketing to take advantage of the growing number of net-surfers, online advertising revenues are set to rise, delegates said at a seminar in Ho Chi Minh City April 15.

The Internet would help businesses focus on young customers, they said at the seminar held by technology and communications EQVN.net, sukientructuyen.com and Saigon Entrepreneurs.

Internet-based campaigns offer greater value than traditional media, they said.

Around 28 million people, or 24.2 percent of the country’s population, surf the Internet, with 80 percent of them being between 15 and 30, Chief Executive Officer of EQVN.net, Truong Van Quy, said.

Revenues from online advertising were around US$38.5 million last year and would rise to $45.4 million this year, he said.

Duty-free supermarket set to open on Cambodia border

Thien Linh Company’s new duty-free supermarket will open this weekend on the Cambodian border in Tay Ninh Province.

Set up at a cost of VND100 billion (US$5.5 million), the 7,200-squaremeter Winmart in the Moc Bai Economic Zone will serve local residents and tourists traveling over the border.

It is expected to stock 20,000 items, including food and foodstuffs, alcoholic beverages, cosmetics, garments and home appliances, 30 percent of them Vietnamese High Quality Goods that are popular in Cambodia.

The government has licensed 60 businesses to trade duty-free in the area.

Food Association to seek higher rice export quota

The Vietnam Food Association said it will ask the government to increase this year’s rice export quota to 5.2 million tons since exports are already closing in on that mark while two more bumper crops are expected.

Exporters have already signed rice export contracts totaling 4 million tons, or almost the whole year’s quota of 4.5-5 million tons, it pointed out. More than half of the contracted volume has been shipped already.

The Association expects around 2 million tons of rice to be harvested in the summer-fall and fall-winter crops, after the recent abundant winter-spring crop.

Vietnam exported 700,000 tons of rice in April, a record since the country started exporting rice 20 years ago.

The volume was almost 27 percent higher year on year, the food association said, and the average price was US$400 a ton.

Vietnam, the world’s second-largest rice exporter, earned about $3 billion from exporting 4.7 million tons of rice last year. (PV)

Vietnam needs long-term rice development strategy

08:41' 14/05/2009 (GMT+7)
VietNamNet Bridge – Rice exporters have voiced concerns that the current style of rice export management will cause farmers and rice exporters losses. Cao Minh Lam, Director of An Giang Afiex Company, said that though Vietnam has been exporting rice for 20 years, it still does not have a detailed strategy on rice development. Troubles in rice management occur every year. 
 
Lam said that Vietnam always strives to reach three goals at the same time, ensuring national food security, fulfilling rice export goals and ensuring the benefits of farmers. Lam said that it is necessary to define which of the three the top priority is as all three targets can’t be met at the same time.
 Lam has suggested that the government assign the Northern and Southern Food Corporations to take responsibility for food security. If the two corporations report volumes of rice big enough for food security, the government should allow enterprises to export rice with no limitations. Meanwhile, a lot of questions have been raised about the role of the Vietnam Food Association (VFA) and the way it has been managing rice exports so far. Nguyen Ngoc Nam, General Director of the Tien Giang Food Company, has pointed out a lot of problems with the association: It does not provide updated information and give predictions about the world market’s performance; it does not pay appropriate attention to trade promotion; and it ignores cases when its member companies scramble for foreign partners. The director of a food company in HCM City has suggested that the Ministry of Industry and Trade take over the work of accepting registrations for rice exports from VFA -- a job it says the association has been doing badly. Meanwhile, Pham Vy Ben, Director of the Thap Son Joint Stock Company, stressed that the government needs to limit the power of VFA as it is very big and has been causing losses for millions of farmers and rice exporters in Vietnam.  In the last 15 years, two rice fever attacks have occurred, in 1998 and 2008. In 1998, due to El Nino and crop failure in the Philippines, Indonesia and China, the regional rice market witnessed a rice fever with the price skyrocketing from $200/tonne to $290/tonne FOB in HCM City. In May 1998, Vietnam decided to halt rice exports, which then made the domestic rice price drop from VND3,900/kg to VND2,300/kg. The sudden price drop made a lot of rice enterprises in the Cuu Long River Delta suffer, as they purchased rice from farmers at high prices. When rice exports were resumed, the world’s price decreased to $200/tonne. Ten years later, in March 2008, Vietnam once again ordered a halt to rice exports. The decision was made after VFA’s Chairman, Truong Thanh Phong, sent a dispatch to the Ministry of Agriculture and Rural Development, Ministry of Industry and Trade, and prime minister, asking for no new export contracts to be signed. “I dare say that Phong made the proposal for the benefit of the Southern Food Corporation, of which he was the general director, not for the benefit of the whole nation,” said Ben. He added that the corporation at that time signed a contract on selling 25% broken rice to the Philippines at $393/tonne. In June 2008, when rice exports were resumed, the rice price in the world’s market decreased, which meant that Vietnamese exporters did not have opportunities to sell rice at high prices anymore. Meanwhile, Ben said that at the meeting discussing rice exports held later in Tien Giang province, Phong shifted the blame on the government and ministries for the loss of $400mil for farmers. “The government should not give too much power to VFA,” Ben said. “If relevant ministries want to control the inventory volume of rice, they just need to ask the State Bank of Vietnam, which will provide information about how much money rice exporters borrow from banks to collect rice. Currently, rice exporters have been relying on bank loans to collect rice to fulfill rice export contracts,” Ben added. 
Export prices down sharply VFA has released a notice, showing the floor export prices which rice export companies should refer to when making deals with partners. 5% broken rice price, which was $450/tonne before VFA released the decision on halting rice exports, has dropped to $410/tonne, while 25% broken rice price, which was priced at $420/tonne, has decreased to $380/tonne.   Though the floor price has been lowered by $40/tonne, businesses still complain they are having difficulty finding customers. “The order to halt rice exports in February 2009 issued by VFA removed business opportunities for enterprises. “As a lot of contracts signed before at high prices have been cancelled, foreign partners have left for other markets,” a businessman said. 
 

VietNamNet/TP

 

Expert calls for prompt rice export management mechanism adjustment
07:47' 09/06/2009 (GMT+7)

VietNamNet Bridge – Professor Doctor Vo Tong Xuan, a leading agriculture expert, has called for a prompt adjustment of the rice export management mechanism, which he believes has a lot of problems.

 

VFA regulating rice exports – illogical: NA deputy

VFA allows resumption of rice exports, but prices decreasing

 He said: 

Professor Doctor Vo Tong Xuan

The Vietnam Food Association (VFA) is just an association, but it has too much power: It can grant rice export quotas to enterprises, but it does not know the production situation and the rice output of every locality.
 There are also problems in allocating rice export quotas. Most export quotas have been granted to two food corporations (the North and South Food Corporations – reporter), while the two corporations do not have farmers and rice growing fields. Some provinces have been granted big quotas while they do not have high rice outputs, while provinces with big outputs have been not allowed to export a large quantity of rice. Some experts say that the currently applied rice export quota allocation has caused big advantages to both farmers and enterprises. What do you think about that? Rice export quota allocation has been undertaken by VFA. The two food corporations always get high quotas. Meanwhile, enterprises which are located right at material-growing areas only get quotas for modest export volumes. As the enterprises do not have quotas for export, they do not collect paddies from farmers. Only the two food corporations purchase paddies from farmers after they get quotas. That explains why the paddy price in the Cuu Long River Delta greatly depends on the prices the two corporations set and the time the two corporations begin collecting paddies. That is one of the reasons that rice prices are unstable. The price ups and downs have made farmers suffer and farmers’ profit remains modest. How about enterprises? 
 
As enterprises get low quotas and they fear an export ban can be promulgated at any time, they cannot take initiative in expanding markets and seeking partners. Also because enterprises do not know what kind of rice customers need, they cannot cooperate with farmers to grow sustainable material areas.
 Enterprises only begin collecting material rice when the delivery deadline nears. As rice comes from different sources, the quality of rice is not the same. Therefore, though being a big rice exporter, Vietnam still does not have a brand name for its rice. How do you think Vietnam needs to amend the rice export mechanism? I think that we need to amend the problematic rice export management scheme. VFA needs to return to the function of a professional association, seeking and providing information to enterprises and acting as a bridge between enterprises and customers. The Ministry of Industry and Trade together with the Ministry of Agriculture and Rural Development and local authorities’ leaders need to undertake the job of allocating rice export quotas after considering forecast figures about rice output. As local authorities well know their rice output, they should be given the right to propose the rice export quotas for their provinces. Deputy Prime Minister Hoang Trung Hai in a recent meeting said that the rice export quota allocation will be stopped, is this true? I agree with the viewpoint that we need to remove the quota allocation scheme. We should do what Thailand has been doing. Thai Ministry of Commerce has been very good at forecasting. It makes public the yearly rice export volume, and then collects rice from farmers at prices which ensure profit for farmers. The rice is later sold to enterprises which have export contracts. Enterprises just need to contact the distribution division of the ministry. With this management method, the country can ensure food security, ensure profit for farmers, while encouraging enterprises to expand markets. 
Nguyen Van Duong, Director of the Dong Thap Department for Agriculture and Rural Development: It is necessary to allocate quotas based on rice output: Dong Thap province puts out 2.7 million tonnes a year, but only two enterprises get export quotas (300,000 tonnes of rice). I agree with Deputy Prime Minister Hoang Trung Hai that it is necessary to adjust the rice export management scheme, while assigning the Ministry of Industry and Trade to form a taskforce on rice export management, which includes representatives of the Ministry of Agriculture and Rural Development and local authorities. The rice export quota allocation should be based on the rice outputs of provinces. Those provinces which have higher outputs should be granted higher quotas for exports, while we should not focus on big corporations. 
 

VietNamNet/TT

Viet Nam must promote rice brandnames abroad

16:01' 08/05/2009 (GMT+7)

VietNamNet Bridge – Despite being one of the world’s biggest rice exporters, Viet Nam has failed to promote its brandnames, Director of the Cuu Long (Mekong) Delta Rice Research Institute Le Van Banh said.

Workers pile rice for export at Sai Gon Port.

Although Viet Nam had a large variety of rice seeds, including specialities, they were not well publicised abroad, he said.

"There are many kinds of rice in Viet Nam, but when sold abroad, they are packed under the name of the importing country."

Behind the failure was the loose co-operation among four relevant partners in rice production: the State, the farmer, the enterprise and the scientist, he said.

"A closer relationship between the four participants will boost brandnames, create sustainable quality products and build prestige in the market," Banh said.

The rice researcher said co-operation between the enterprise and the farmer was the most important. Businesses were responsible for finding a market for the farmer and building up a good reputation.

"But it hasn’t been effective," he said.

Banh also blamed scientists for not making the most of their role to make proper forecasts on rice demand across the world and advance post-harvest technology to promote Vietnamese brand names.

Another reason Banh claimed on was the matter of food security for the country.

"Just compare Viet Nam and Thailand, which has 10 million hectares of rice land with a population of more than 60 million, we can see a part of the problem," he said. "Meanwhile, Viet Nam just has nearly 4 million hectare of rice land to feed more than 86 million people."

Thailand focuses on growing good quality rice varieties which have long maturing period that can produce 1-3 tonnes per hectare. Viet Nam plants lower quality varieties with a much shorter maturing period which can produce 6-8 tonnes per hectare.

"This is a real challenge for domestic production and export. Foreign rice is penetrating the Vietnamese market as a result of our membership of the World Trade Organisation."

Prof Vo Tong Xuan, former rector of An Giang University, also blamed low quality rice.

"Export companies and traders always buy rice directly from farmers with different kinds of rice grains mixed together," Xuan said, "With such a buying method, they cannot ensure the homogeneity of the rice, and so the quality is low.

"That is why Vietnamese rice is not popular around the world," he said, adding that Viet Nam should develop areas specialising in one-rice cultivation to make sure the rice is homogeneous.

Xuan pointed to rice production in the Cuu Long (Mekong) Delta, where households own several different areas and grow different rice varieties.

Last year, the Cuu Long (Mekong) Delta, produced over 20 million tonnes of rice out of the country’s total 30 million tonnes. It annually provides 51 per cent of the output and accounts for 80 – 90 per cent of rice for export.

Xuan said to create a brandname for Vietnamese rice, export companies should be allowed to decide the selling market for themselves.

"Once they do that, they can find a region that will suit their own products and can set up a synchronous production system to improve rice quality – from seeding-machines, mowing-machines to husking-machines," he said.

"The State must act as a leader in setting up policies to prompt farmers to work together, apply proper planting methods and advanced techniques," he said.

Xuan also urged policy-makers to set up legislation to encourage co-operatives or collective groups for farmers.

"Such co-operatives will be a base for enterprises and traders to find quality agricultural products for export and buy at prices that benefit farmers," he said.

VietNamNet/Viet Nam News

Gov’t urges rice exporters to seek more contracts
11:02' 05/06/2009 (GMT+7)
VietNamNet Bridge – Deputy Prime Minister Hoang Trung Hai has encouraged rice exporters to sign more and more contracts, emphasising that the Government has not limited the amount of rice for export.

Farmers in Chau Thanh district, An Giang province, on the race of their combine harvester. (Photo: VNS)

Hai made the statement at an online working session with the Mekong Delta on rice exports on June 4 after representatives from the nation’s largest rice producer asked the Government to raise its export targets as well as allow businesses to buy out rice paddies from farmers as reserves if prices start to fall.

“Businesses should work hard to fulfil the governments target to export 5 million tonnes of rice this year along with making efforts to seek out new markets and contracts,” said the deputy PM.

He asked the Ministry of Agriculture and Rural Development (MARD) and the Ministry of Industry and Trade to make a full inventory of rice storage facilities to determine the best time for launching buy-out measures to avoid losses to farmers.

MARD Minister Cao Duc Phat echoed the government leader’s view by calling on rice producing businesses to sign more exports contracts in the next few weeks.

At this point, farmers in the Mekong Delta have finished harvesting the winter-spring crop and are planting seedlings for the summer-autumn crop as well as preparing for the following season.

MARD expected the nation’s rice bowl would produce 20.7 million tonnes of pre-husked rice this year, leaving 10.4 million tonnes (roughly 5.2 million tonnes of husked rice) for sale overseas after ensuring food security for the southeastern region.

President of the Vietnam Foodstuff Association Truong Thanh Phong said that the world demand for rice has rebounded since May after a short halt due to misinformation that major exporters such as Thailand and India had no stocks of rice left.

He said that as of June 3, the association’s member businesses had signed rice export contracts for over 4.1 million tonnes and expected that shipments overseas in the first six months of the year would reach 3.6 million tonnes as planned.

“Rice exports are likely to meet the Government’s annual target for over 5 million tonnes,” said the watchdog’s chief.

Rice Market Monitor, February 2009

The Rice Market Monitor provides an analysis of the most recent developments in the global rice market, including a short-term outlook. Presently, the full document is available only in English but highlights are available in Spanish and French.

February 2009, Volume XII - Issue No. 1

ROUND-UP

The 2008 paddy season is coming to a close with much more buoyant expectations over production than previously anticipated. FAO’s latest prospects point to a level of world paddy production in 2008 of 683 million tonnes (456 million tonnes, milled rice equivalent), 23 million tonne, or 3.5 percent more than in 2007 and the fastest growth since 2005. The increase would be based on a 2.2 percent rise of the area to 159 million hectares, a positive reaction to high prices and to government support. Favourable growing conditions also boosted average paddy yields by 1.3 percent to 4.3 tonnes per hectare, despite soaring costs of fuel and fertilizers, and difficult access to quality seeds. Much of global production gain is expected to be concentrated in Asia but, with impressive increases foreseen in Africa, the region looks set to make an important contribution to world expansion in 2008. Although downgraded somewhat since July, output prospects are positive in North America and Latin America and the Caribbean, while a decline is anticipated in Oceania and Europe.

The 2009 paddy season has already started in southern hemisphere countries. Although too early to draw a global production forecast, prospects are positive in Indonesia, but still uncertain in Madagascar and Mozambique where the cyclone season has already started. Continued shortages of irrigation are again limiting plantings in Australia to well below normal. In South America, little growth is currently anticipated in Brazil while drought depressed planting in Uruguay. In Argentina, the area has increased but drought may affect yields.

FAO’s forecast over world rice trade in 2009 now points to a volume of 31 million tonnes, 200 000 tonnes more than in 2008, but still short of the 2007 record. However, there is much uncertainty as to the effects of the downturn of the world economy on the volume and nature of rice transactions in 2009. Given more difficult access to credit and lack of confidence over the financial situation of trade players, one possible effect could be an intensification of barter and government-to-government deals, as already witnessed.

The increase in world imports in 2009 is likely to be sustained by low prices relative to last year. Asian countries are expected to absorb 48 percent of the total in 2009, or 14.8 million tonnes, marginally more than in 2008. Bangladesh, Indonesia, the Philippines and Turkey are foreseen to buy less after harvesting good crops. By contrast, Afghanistan, China mainland, the Islamic Republic of Iran, Iraq, the Democratic Republic of Korea, Saudi Arabia, the United Arab Emirates and Yemen are expected to import more, often to cover production shortfalls, but also to reconstitute national food reserves. In the wake of the excellent 2008 paddy crops, rice imports in Africa may decline by 3 percent to 9.3 million tonnes, which, if confirmed, will be the lowest volume since 2004. Imports in Latin America and the Caribbean are now set to hover around 3.5 million tonnes in 2009, up 3 percent from last year. Of these, 2.4 million tonnes are anticipated to be directed to Central America and the Caribbean, mainly Cuba, Haiti, Mexico and Nicaragua. In South America, imports may rebound in Brazil, Bolivia and Colombia. In North America, Oceania and Europe, import prospects in 2009 are mixed. Australia may need to step up its purchases, while those by the EU may reach a record 1.5 million tonnes. By contrast, the United States may cut its imports.

 

Large supply availabilities in the traditional exporting countries are set to foster a small increase in global rice exports. The expected lifting of export curbs in Egypt and India in April or May 2009 will also help boost trade. Among the various sources, China, India, Myanmar, Pakistan, Viet Nam and Egypt are forecast to increase their exports, more than offsetting lower expected deliveries by Brazil, Cambodia, Thailand and the United States.

One outcome of the 2008 global production surge is expected to be a strong rebuilding of world rice stocks carried over 2009, now forecast to reach 118 million tonnes, the highest since 2002 and 9 million tonnes more than in 2008. Globally, reserves in 2009 would be sufficient to cover 25.8 percent, or roughly three months, of planned utilization in 2009, up from 24.4 percent in 2008. The higher value of the stock-to-use ratio is indicative of an improved level of security, as far as rice is concerned, at the world level, which does not preclude shortages at the national or sub-national levels. Much of the stock build-up is expected to be concentrated in exporting countries, and especially in China and India, which hold the largest rice reserves, but also in Egypt, Pakistan, Thailand and Viet Nam. Traditional importing countries, such as Indonesia, Sri Lanka, Saudi Arabia and the United Arab Emirates, are also foreseen to increase the size of rice inventories.

 

Since reaching peak levels last May, world rice prices have steadily declined until December 2008, reflecting a retreat of importers and the harvesting of large 2008 main paddy crops since October. However, rice prices in 2008 still averaged 80 percent higher than in 2007. They are also higher than usual compared to wheat. The relative strength of world rice prices largely reflects government interventions, in particular large public procurement purchases of rice in Thailand. Given expectation of good 2008 secondary crops soon to reach the market, a relaxation of Egypt and India’s export restraints and subdued import demand, further price drops cannot be excluded in the next few months. However, given increased average production costs in 2008 and the high prices offered under official procurement programmes, export quotations falling below USD 400 per tonne for top quality white rice would result in severe losses to producers and to the public sector of the exporting countries, while also hampering polices geared towards self-sufficiency in many importing countries.

 

Last Updated on Thursday, 18 June 2009 13:42  

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