The world's second-biggest rice shipper may increase exports to 5 million metric tonnes compared with 4.7 million tonnes in 2008, deputy Agriculture minister Diep Kinh Tan said today. The weather in the main growing areas in the southern Mekong Delta "has been favourable for the crop," Tan said by phone.

Increased rice shipments from Vietnam may enable the nation to boost earnings from agricultural crops, offsetting reduced payments from manufactured exports amid the global recession. Still, global rice prices have declined 19% this year on the Chicago Board of Trade.

"The additional 300,000 tonnes from Vietnam is not a lot, we already expect some growth in volume this year," Sumeth Laomoraphorn, president of Bangkok-based C.P. Intertrade Ltd, said by phone. "I don't see a big impact on prices."

Rice futures in Chicago traded at US$12.415 per 100 pounds today, about half the record high touched last April amid concerns of worldwide food shortages. Thailand's 100% grade-B white rice, a benchmark for Asia, was set at US$624 a tonne on February 4, according to the Thai Rice Exporters Association. Thailand is the world's top rice exporter.

National Stockpiles

Sufficient national rice reserves would enable the government to increase shipments, Tan said, echoing comments from Agriculture minister Cao Duc Phat late yesterday. "Along with stockpiles carried over from last year, export volumes will be high," Phat had said in a statement on the state Web site.

Vietnam's winter-spring harvest, which starts in December and ends by April, is critical in helping policy makers to project annual export volumes. The delta produces about 60% of the national rice crop, and accounts for 99% of rice exports, according to the Vietnam Food Association.

More than 5 million tonnes of unmilled rice will be harvested this month and next month in half of the 1.8 million hectares (4.44 million acres) of paddy fields in the Mekong Delta, according to Phat's statement.

Vietnam's economy expanded 6.2% last year, the slowest pace since 1999. The government wants to boost exports, while forecasting that 2009 will be "more difficult" for the economy than 2008, according to prime minister Nguyen Tan Dung.

"Under the current situation, when the global economic crisis is deepening, we need to focus on trying to reduce the costs and increase the quality and competitiveness of our agricultural products," Phat said in the statement.

Bloomberg - february 13, 2009