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USDA GAIN: Oilseeds, Cotton, Sugar, Grain and Feed


21 October 2013

USDA GAIN: Vietnam Grain and Feed Update September 2013USDA GAIN: Vietnam Grain and Feed Update September 2013

Post revises total rice production for MY 2012/2013 up over 500,000 tons, to 44.32 million tons of paddy rice, compared to Post’s last estimate in June. The increase of total production is due to an unexpected expansion of planted area of the autumn and winter rice crops in the Mekong River Delta (MRD).
USDA GAIN Report - Oilseeds, Cotton, Sugar, Grain and Feed

Post:

Hanoi

Commodities:

Rice, Milled

Estimate for MY 2012/2013 (began January 2013)

Post revises total rice production for MY 2012/2013 up over 500,000 tons, to 44.32 million tons of paddy rice, compared to Post’s last estimate in June. The increase of total production is due to an unexpected expansion of planted area of the autumn and winter rice crops in the Mekong River Delta (MRD) during a period of tight competition among major Asian rice exporters.

Autumn Crop

The autumn crop is mainly planted in the Mekong River Delta, which comprises about 80-85 percent of the total autumn crop planted area. The MRD autumn crop consists of a Main Autumn crop and Late Autumn crop. The Late Autumn crop is only planted in the MRD, after the harvest of the Main Autumn crop in limited area where the land elevation is high enough to avoid the flooding from the Mekong River, and is sometimes called the third crop.

As of September 15, 2013, despite the bottleneck rice export situation, the total autumn crop is revised to 2.93 million hectares, up about 110,000 hectares from Post’s last estimate in June. The increase is mainly due to the favorable weather conditions for planting and reduced shrimp cultivation in the MRD. Post revises the harvested area for Main Autumn crop in the MRD from 1.67 to 1.7 million hectares and Late Autumn crop from 740,000 hectares to 790,000 hectares.

Currently, the planted area of the Main Autumn crop in the coastal area of the MRD is estimated by the Ministry of Agriculture and Rural Development (MARD) at more than 1.71 million hectares and the harvested area was approximately 1.56 million hectares, as of September 15, 2013. The harvest of the main crop is later than normal this year due to the late arrival of the rainy season.

Winter Crop

According to the MARD agricultural production report in September, the northern part of Vietnam has completed the planting of the winter crop and the planted area in the north is about the same as MY 2011/2012. In the MRD, the planting is on-going and is reported 15,000 hectares higher than the MY 2011/2012 winter crop. The other areas in the southern part of Vietnam are estimated unchanged compared to the MY 2011/2012 winter crop. Post revises the total harvested area for winter crop, up 20,000 hectares to 1.79 hectares, driven by the increase of planted/harvested area in the MRD, favorable weather conditions, and the farmers shifting from shrimp to rice.

Forecast for MY 2013/2014 (began January 2014)

Post revises the forecast of total paddy rice production for MY 2013/2014 up slightly from 44.32 million tons to 44.35 million tons due mainly to higher paddy yield, despite the drop in forecasted total harvested area from 7.86 million hectares to 7.79 million hectares in MY 2013/14.

The harvested area is forecasted down about 20,000-30,000 hectares for each individual crop following guidance of the Government of Vietnam to reduce rice planted area to avoid the over-supply and to shift to other commodity crops (mainly corn and soybeans) in order to help increase farmer’s income and support the local animal feed industry which relies heavily on imports of those commodities for use as feed ingredients.

Exports

The Vietnam Food Association (VFA) has recently reduced the export target for MY 2012/2013 from 7.5 million tons to 7.0-7.2 million tons of milled rice due to the strong competition from other rice exporting countries, especially Thailand, India, Pakistan, and Myanmar. According to VFA, Vietnamese rice exporters still expect some sales to the Philippines and Indonesia, two traditional Vietnamese markets, sometime by the end of the Marketing year. However, Vietnamese exporters face strong competition from other Asian exporters in the African market, also one of the top buyers of Vietnamese rice. China, the biggest Vietnamese rice buyer earlier this marketing year has recently halted its purchase of Vietnamese rice. According to trade sources, the Chinese government is restricting the issuance of import quotas to rice importers. Additionally, trade sources also report that the Chinese government recently signed a government-to-government rice import contract with Thailand. For these reasons, Post revises the MY 2012/2013 Vietnam rice export estimate down from 7.4 million tons to 7.2 million tons. Given the fierce competition in two of Vietnam’s major export markets (Africa and Indonesia and the Philippines) Post also revises the forecast of MY 2013/2014 down from 7.8 million tons to 7.5 million tons.

October 2013

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