Vietnam may cut its 2012 rice exports to 6.5 million tonnes after shipping a record volume of 7.2 million tonnes this year, and prices could fall on ample supply, a state-run newspaper quoted an Agriculture Ministry official on Thursday as saying.
Thanks to high value of the rice sales in 2011, farmers have been expanding the area of low-quality varieties, Nguyen Tri Ngoc, head of the ministry's Crops Department was quoted by the Vietnam Economic Times newspaper as saying. "Especially the planting of IR50404 variety is alarming, so the risk is that 2012's export would face rice prices falling," Ngoc told the newspaper in an interview.
Ngoc's comments on next year's production and export levels are lower than those made by Deputy Agriculture Minister Diep Kinh Tan who was quoted on Tuesday as saying that Vietnam targets exports of 7 million tonnes of rice. Ngoc's remarks are the first by a Vietnamese government official on the impact of rising competition by cheaper grain from India and Pakistan that could affect Vietnam's market share in 2012 and eat into the rice bowl of millions of Vietnamese farmers.
Intensifying competition between Vietnam and India for a bigger share of the rice market made available by the drop in costlier Thai exports have pushed prices down around Asia. Ngoc did not make any price forecasts, but said that unlike Thailand, Vietnam's rice strategy is to provide various rice grades from low to high quality grain to meet market demand. He said difficulties such as the winter-spring crop plantation delayed by seasonal floods that could affect the next summer-autumn crop in 2012 have prompted Vietnam to cut its paddy output by 1.2 percent next year from 2011 to 41 million tonnes.
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