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Rice exports forecast to struggle

Vietnam News, February 27, 2004

HCM CITY—Viet Nam’s rice exports could suffer in the face of falling worldwide sales, a local official said.

World sales are expected to drop by 2 million tonnes this year, said Truong Thanh Phong, general director of the Southern Food Corporation (Vinafood 2).

India this year plans to export 2 million tonnes, a fall of 50 per cent from last year while US rice exports are expected to fall by 1 million tonnes.

Viet Nam also plans to export 3.3 to 3.5 million tonnes of rice this year, compared with 3.9 million tonnes last year.

Agricultural officials said the rice output from the winter-spring crop, the main export crop of the year, will drop by 230,000 tonnes and exports would hit 2.5 million tonnes in the first half of this year.

They blamed the export slump on an exceptionally large amount of rice exports in the last months of 2003.

Food companies also are worried about the prolonged drought which could damage rice fields.

Many food exporters have failed to secure contracts because they have been unable to buy rice from local farmers.

Food companies in January exported 100,000 tonnes of rice, half of the amount in the same month last year.

Exports are expected to increase to 200,000 tonnes in February, and 400,000 tonnes in March.

Also affecting sales is Indonesia, one of Viet Nam’s major rice importers.

It has temporarily banned rice imports and has asked the government to increase rice import taxes from 30 per cent to 60 per cent to protect domestic rice production.

With the expansion of the EU, Viet Nam may fail to keep its traditional markets of Poland, the Czech Republic and Slovakia, as the new EU members could apply higher import taxes and no longer import Vietnamese rice.

Each year, Viet Nam sells about 80,000 to 100,000 tonnes of rice to the Eastern European market.

The Viet Nam Food Association has asked the trade ministry to include this issue in its trade negotiations with the EU.

The association wants the EU to allocate rice export quotas to Viet Nam, with preferential taxes of zero per cent beginning in 2004.

Vietnamese rice is exported to Indonesia, the Philippines, Cuba, Malaysia and Singapore, but Viet Nam also plans to expand to new markets, including Angola, Libya, Algeria and countries in Latin America.

Viet Nam this year has signed contracts to export around 1 million tonnes of rice. — VNS

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