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Rice exports to hit record $3.1 billion   2010-12-08 - VNS

LONG AN — Local rice exporters need to be careful in signing new contracts for next year even as Viet Nam gets set to exceed annual targets and attain a record high turnover of US$3.1 billion this year, experts say.

The latest export figure for 2010, released by the Viet Nam Food Association (VFA) at a meeting in Long An Province on Monday, is much higher than the targets of $2.5 billion to $2.8 billion set earlier.

The cautionary advice about next year's exports was based on a report that predicts world rice prices may triple in the next 18 months because of adverse weather conditions suffered by the world's largest exporters, including Thailand.

The VFA told the meeting that its members had exported 6.3 million tonnes of rice in the first 11 months of the year and an additional 400,000 to 450,000 tonnes would be shipped to buyers this month.

Truong Thanh Phong, VFA chairman, said at least 6.7 million tonnes of rice would be exported this year, a year-on-year increase of 11 per cent.

Phong said so far this year VFA members had signed contracts to export over 6.9 million tonnes of rice valued at over $2.9 billion.

However, the country's rice exports in 2011 would be lower at between 5.5 million to 6 million tonnes, he said.

Phong said some 500,000 tonnes of rice maintained as reserves in 2010 would be transferred to 2011, much lower than the 1.4 million tonnes carried from 2009.

VFA officials said prices of the winter-spring crop would increase due to higher production costs caused by fertiliser price hikes as well as the incidence of pests and diseases.

The association also forsees a bustling world rice market in 2011.

The Philippines has announced the extension of a Government agreement to buy rice from Viet Nam until 2013, taking in shipments of 1.5 million tonnes from 2011.

Other than the Philippines, Indonesia, Malaysia, Bangladesh and Iran will be the main buyers of rice from Viet Nam next year.

Addressing the Monday meeting, Le Truong Son of Docimexco, a rice exporter and VFA member, said the association should be very careful in signing rice export contracts for 2011.

Bad weather could have serious impacts on rice demand in the world market, he explained.

Son's statement came after Singapore-based Duxton Asset Management Pte released a report saying rice prices may triple in 18 months as flooding in exporting nations including Thailand tightens supplies and demand soars

"The most severe floods in five decades in Thailand, the top exporter, may trigger a 7 per cent fall in rough-rice production, which accounts for 70 per cent of its total output," the Agriculture and Cooperative Ministry of Thailand was quoted by Duxton as saying.

Crops in Viet Nam and Pakistan had also been hurt by severe weather, while a typhoon cut harvests in the Philippines, the biggest importer, said the Duxton forecast.

Meanwhile, a recent report released by the Food and Agriculture Organisation has estimated global rice production at 697.9 million tonnes, 6.5 million tonnes less than previously estimated, as crops around Asia "deteriorated".

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