Vietnam to increase rice output this year to benefit from price rise

Credit: REUTERS/KHAM

By Khanh Vu

HANOI, Aug 1 (Reuters) - Vietnam will increase its rice production this year to take advantage of a price surge, the head of the country's Department of Crop Production said on Tuesday.

The country's unhusked paddy output is expected to rise to more than 43 million metric tonnes this year, from 42.7 million tonnes last year, Nguyen Nhu Cuong said in a statement posted on the government's website.

The rice growing area of the upcoming autumn-winter crop in the Mekong Delta will be raised by 7.7% from an initial plan to 700,000 hectares, he added.

Vietnam's 5% broken rice prices RI-VNBKN5-P1 rose to $580-$590 per metric tonne on Tuesday from $515-$525 two weeks ago, traders said, after India on July 20 ordered a halt to its largest export category to calm domestic prices.

"This is an opportunity for us to boost rice exports," Cuong said.

He said Vietnam's total rice exports this year would rise to 7.8 million metric tonnes from 7.1 million tonnes recorded last year.

"Increasing exports at this time won't threat Vietnam's food security," Cuong said.

Rice shipments from Vietnam in the first seven months of this year were estimated to have risen about 18.7% from a year earlier to 4.84 million metric tonnes, according to the government's preliminary data. Revenue from rice exports in the period was seen up 29.6% at $2.58 billion.

Rice exporters in Thailand and Vietnam are renegotiating prices on sales contracts for around half a million metric tonnes for August shipments, two trade sources said, as India's ban has tightened global supplies.

The chairman of Vietnam Food Association said on Monday the country has no immediate plans to restrict rice exports.

(Reporting by Khanh Vu; Editing by Louise Heavens and Barbara Lewis)

((khanh.vu@thomsonreuters.com; +84 24 38259623;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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