Trend threatens rice exports

More importers of Vietnamese rice are ready to turn their backs and grow the crop locally

The move would hurt Vietnamese rice exporters as this market imported 50 per cent of Vietnam’s total rice exports over the past four years, said the Ministry of Agriculture and Rural Development’s (MARD) Crop Production Department.

“If the Philippines’ demand for rice imports declines, global rice prices will also be remarkably affected,” said the department’s director Nguyen Tri Ngoc.

International newswires have recently reported the Philippines’ Department of Agriculture as saying that it could halve its rice imports next year as the world’s largest rice importer had been focusing on local rice production to ensure sufficient supplies over the next three years.

The Philippines’ National Food Association have recently asked Vietnam Southern Food Corporation (Vinafood 2), which occupies half of Vietnam’s total rice exports, to delay delivery of the remaining rice volumes contracted until September, 30 instead of August 15, 2010, because the Philippines imported nearly enough rice for 2010. 

According to Hanoi-based Agrovietlink Corporation, which is specialised in market analysis, the Philippines’s pilot FIEL (Farmer, Irrigation, Energy, Labour) programme, which kicked-off in 2009, has tripled the country’s rice output.

The programme is the first of its kind in the Philippines and initiated amid the country’s suffering from bad weather which harmed its rice crops. The programme includes a master plan to revise the country’s rice supply, ameliorate the irrigation development, give financial support to farmers and post-harvesting conditions, as well as boost local rice distribution and orientation towards rice exports in the future.

Vietnam’s Ministry of Industry and Trade said it was working with Vietnam Food Association and Vinafood 2 to revise Vietnam’s rice export situation to find solutions.

“Not only the Philippines, but also many other countries like Myanmar, Indonesia, Malaysia, Cambodia and India are also focusing on rice production development for fear of potential food insecurity,” Ngoc said. He added that local exporters needed to seek out more foreign export markets to shun risks brought about by the Philippines market.

Vietnam exported 4.1 million tonnes of rice during this year’s first seven months, with an export turnover of more than $2 billion, down 2.5 per cent in volume and 3.4 per cent in value against last year’s corresponding period. Vietnam is expected to export six million tonnes of rice this year.