Viet Nam increases share in export market

Bangkok - Rice production over the 2009 season is now estimated at 678 million tonnes, 2 percent below 2008’s crop, but still the second highest production on record. Over the year, Viet Nam stood out as a major source of trade supplies with its export share estimated to have risen from 16 to 20 percent, FAO said today.

The present outlook for rice harvests reflects better than previously anticipated prospects in major producing countries in Asia, and Europe, which had suffered unfavourable climatic conditions and adverse weather, in particular drought, according to the December 2009 issue of FAO’s Rice Market Monitor.

Rice production
The overall production forecast in Asia now stands at 612 million tonnes, some 12 million tonnes below 2008. Very strong gains are expected in mainland China, Indonesia and Myanmar, while contractions particularly hit crops in Bangladesh, India, Pakistan and Nepal.

At 24.5 million tonnes, production prospects are negative for Africa, 3 percent less than the previous year, driven by a cut in plantings in Egypt but also reflecting rainfall deficits in Chad, Mauritania, Niger and Tanzania. By contrast, sizeable gains are anticipated in Madagascar, Mali, Nigeria and Senegal.

The 2009 outlook remains positive for Latin America and the Caribbean, where output is estimated to rise by 4 percent to 27.4 million tonnes.

In other regions, production is set to rise in Europe, Russia and the United States. Despite a recovery, 2009 paddy production in Australia continues to be constrained by lack of water for irrigation.

Rice trade
FAO’s estimate of global rice trade in calendar 2009 points to a volume of 30.0 million tonnes, marginally below the level traded in 2008.

Imports by Asian countries – in particular Bangladesh, Indonesia, Malaysia and the Philippines - were cut, while shipments to countries in Africa and Latin America and the Caribbean rose.

Rice exports dropped in China, Pakistan, Thailand and the United States. Government curbs in India and Egypt also restrained the availability of rice for trade.

Exports by Viet Nam surged to a new record of 6.0 million tonnes, up 27 percent from 2008, due to ample supplies and competitive prices compared to other origins. Argentina, Brazil, Cambodia and Myanmar were also able to step-up shipments.

World trade in rice in 2010 is forecast to recover slightly to 30.5 million tonnes, sustained by increased exports by Thailand which look set to rebound, but also by China, Myanmar and Viet Nam, compensating for reduced shipments from Cambodia, the US and Uruguay.

Rice prices
International rice prices strengthened in the last quarter of 2009, reversing a downward trend that had been sustained since May. This was reflected in the FAO All Rice Price Index rising by 15 points to 247 points from September to December.

The rebound of world quotations mainly concerned the Indica rice market, with gains particularly evident in lower quality varieties, which gained 49 points over the period. Prices for higher-quality Indica rice also strengthened, while quotations for both Aromatic and Japonica varieties lost ground.

On average, rice prices in 2009 fell 42 points below their value in 2008, remaining, however, 92 points above the 2007 average.

Prospects for prices in the coming months are uncertain, but with the major exporting countries holding less supply or imposing export restrictions, prices are unlikely to subside before newly harvested crops reach the market in March/April.

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