(VEN) - The Vietnam Food Association (VFA) reported that Vietnam exported 2.139 million tonnes of rice worth US$1.02 billion from January to Mid-April 2011. The sales are expected to be more difficult in the second quarter of this year due to political tensions in the Middle East and Africa that could make Vietnamese businesses lose their markets in these regions.

VFA said that signed rice purchase and sale agreements would fulfill the target of exporting almost two million tonnes of rice in the second quarter of this year. The association also said that the management of export rice prices and rice purchases for reserve has been strengthened to assure farmer interests.
VFA chairman Truong Thanh Phong said that in the first quarter of this year although they encountered difficulties in trading with Africa and the Middle East due to political tensions in these markets, Vietnamese businesses exported a large amount of rice, the highest volume compared to the same time in previous years, because they properly shifted sales to other markets such as Indonesia and Bangladesh. At the beginning of this crop, VFA managed to make it possible for its member businesses to buy one million tonnes of rice for reserve, sign purchase/sale contracts and buy dried paddy rice at a price of VND5,000 per kilo from farmers, he said.
The global trade in rice in 2011 was forecast to decrease due to increases in rice reserves and inventories. Therefore Vietnam's rice exports in the second quarter of 2011 will probably drop if nothing new appears. Phong said that almost all rice purchase and sale agreements will fulfill the country's target of exporting almost two million tonnes of rice in the second quarter of this year. Businesses in Vietnam have so far signed contracts to export 1.6 million tonnes of rice. The Philippines is expected to be a major importer of Vietnamese rice in the second quarter of 2011, as it agreed upon importing about 860,000 tonnes of rice in this period. China is also an important and potential market for Vietnamese rice exporters, while Japan is expected to increase rice imports to cover rice shortages caused by the tsunami and earthquake.
Exporters need to prepare for signing export contracts for the third quarter of 2011, a period in which many adverse changes are expected to happen and rice exports are expected to face difficulties, Phong noted.
The Ministry of Agriculture and Rural Development forecast that Vietnam's rice exports would reach 7.1-7.4 million tonnes in 2011. While exports are expected to increase and benefit from good prices, Vietnamese rice exporters will face major challenges related to the opening of its market. Previously, foreign businesses must enter joint ventures with Vietnamese businesses in rice, paddy rice purchase, sales and export. Starting in 2011 when Vietnam first opens its rice market in accordance with its WTO (World Trade Organization) commitment on opening rice and paddy rice markets, foreign businesses can directly participate in the Vietnamese rice/paddy rice market.
The agriculture and rural development sector provided detailed guidelines for increasing the cultivated area in the Mekong Delta in the autumn-winter crop by 10,000 hectares to increase paddy rice production by 500,000 tonnes, and expanding intensive cultivation to increase rice yield by 5-10 percent./.
By Thanh Thanh