Vietnam rice report – april 2014 vietnam agricultural report research

Vietnam’s Mekong Delta provinces in February have harvested 650,000 of a total of 1.6 million hectares of rice, with total volume around 11 million tons; 34,000 tons increased compared

Project

Vietnam Agricultural Report Research

April 2014 Rice Market Review and Analysis

Research duration: from January to 8th April 2014

Reported by: Ho Cao Viet (PhD)

Submission of draft report for review: 4th April 2014

Submission of full report: 8th April 2014.

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Table of Contents

1 Introduction 4

2 Hot topics of the month 4

3 Weather condition and its impacts to rice production 7

3.1 Weather forecasting on March 2014 8

3.2 Impacts of weather to agriculture 12

4 Situation of rice production-consumption in Vietnam and global market 12

4.1 Progress stages, crop conditions 12

4.2 Demands in domestic, exportation & importation 16

4.3 Domestic prices and Market trends 19

4.4 Export prices and Market trends 22

4.5 Analysis, Opinion, and Prediction 24

4.6 Other related news 26

List of tables

Table 1 Forecast of average temperature and precipitation on March 2014 in Vietnam 10

Table 2 Monthly hydrological forecasting for rivers in the Central highland & Southern Vietnam (1st to 31st Mar 2014) 11

Table 3 Rice sowing area in WS crop by region (up to 15th Feb 2014) 13

Table 4 Rice sowing area of WS crop in the North provinces (up to 15th Feb 2014) 14

Table 5 Rice sowing area of WS crop in the South provinces (up to 15th Feb 2014) 14

Table 6 Weekly rice exportation (Dec 2013 to Feb 2014) 16

Table 7 Monthly rice exportation (Jan 2013 to Feb 2014) 17

Table 8 Rice exportation by import country in February, 2014 19

Table 9 Price of different rice grades in MRD (13th Feb to 27th Mar 2014) 20

Table 10 Thailand and Vietnam rice price quotes (Aug 2013 to Feb 2014) 22

Table 11 Rice prices of Vietnam, Thailand in the world market (3 first weeks of Mar 2014) 24

List of figures Figure 3 Weather Maps (1st March & 25th March 2014) 9

Figure 1 Forecast of precipitation mean on March, 2014 9

Figure 2 Forecast of temperature mean on March, 2014 9

Figure 4 Fluctuation of rice price in domestic by grade in Feb and Mar 2014 21

Figure 5 Fluctuation of long-grain paddy price in domestic in Feb and Mar 2014 21

Figure 6 Volume of Vietnam exported rice and value (Jan 2010 to Mar 2014) 23

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 The database and information used in report were collected since January

2014 to the end of March 2014 from different official sources as well as direct contacts to experts who involved to rice sector

 Information is updated and bearing the major events and topics of rice production and consumption in Vietnam in referring to the global market

as well as the analysis of authors and rice specialists

 Since early this year, the five biggest rice exporters in the world (Thailand, India, Viet Nam, Pakistan and the US), have sold only 4.1

million tons, a fall of 7.2 % compared to the corresponding period of

2013 Therefore, the Ministry of Agriculture and Rural Development (MARD) stated that in this year's winter-spring rice crop (WS) will have high yield and there will be a great pressure to rice exportation Vietnam’s Mekong Delta provinces in February have harvested 650,000 of

a total of 1.6 million hectares of rice, with total volume around 11 million

tons; 34,000 tons increased compared to last year

 By the end of February, 2014, VFA's members have exported 791,400

tons at value of $370.997 thousand, down by 1% quantity and 3% in

value as compared to the result of corresponding period of 2013 (General Department of Vietnamese Customs - VC)

 According to the Vietnam Food Association (VFA), in mid-February,

Thailand sold 600,000 tons of rice and another 800,000 tones in March Thai Government also plans to sell 1 million tons per month, reaches to 5

million tons by the end of March 2014 "Thailand's rice export price is

expected to fall, and this will affect Vietnamese rice exports" said a VFA representative

 According to MARD, the WS crop in Southern Vietnam is expected to reach about 11.7 million tons of paddy rice from 1.605 million hectares and average yield of 6.83 tons, up about 1% from 11.6 million tons in previous year Local sources say that domestic prices in Vietnam's Mekong Delta have declined to about 5.1 - 5.4 million dong (around $240

- $256) per ton in March, down about 7% from around 5.5 - 5.8 million

dong (around $258 - $272) per ton in February 2014 Prices are likely to

drop further due to the estimated bumper rice crop in Vietnam

 In the middle of March 2014, Vietnamese government has approved the

stockpiling scheme of about 2 million tons of paddy rice by private

companies for about 4 months to avoid a price drop as the country’s main

WS rice crop harvest peaks in March The State Bank of Vietnam (SBV)

has provided 8 trillion dong (around $379,500) as loan with 7% annual

interest rate to private companies to buy paddy from 15th March to the end of April 2014 However, it remains doubtful whether the stockpiling scheme will succeed in preventing losses for farmer In last year, the stockpiling program had little impact on prices and is unlikely to support price this time as well VFA said that stockpiling of rice may not control prices like in the previous year because Thailand is offloading its huge stocks this year and the prices would be market driven Therefore, VFA

recently lowered the minimum export price of Vietnamese rice by about 3% to help it remain competitive against Thai rice (www.oriza.com/news/, www.tintucnongnghiep.com)

 In the middle of March 2014, paddy rice prices in the Vietnam’s Mekong Delta increased slightly after the government approved decision to purchase 2 million tons of paddy rice Early 2nd week of March, the price for WS rice remained highly, but then it suddenly fell, partly due to competitive pressure from Thai rice Meanwhile, demand from international rice importers has not been high as they are waiting for the

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expected lower prices However, after the decision, Vietnamese farmers

and traders resumed business as prices inched up In the end of 2nd week

of March, price has increased a bit around 100 dong per kg compared to that of 1st week

 According to MARD, the Vietnamese government is planning to shift

around 130,000 hectares of rice area to other crops such as soybeans

and corn as the strategy of cropping-pattern changes in agriculture and rural development in 2014 Because the Vietnam’s rice area stood at around 7.9 million hectares in 2013, but corn area was a mere 1,157 hectares Vietnam’s rice production exceeds consumption needs of the country every year, but the country imports around 4 million tons of corn and soybeans yearly to produce feedstuff for animal husbandry The MARD will guide rice farmers to shift crops which will help them to improve farm income in 2014 and coming years However, Vietnam will maintain level of rice production by expanding modern rice fields and using appropriate rice varieties for export in an area of around 200,000 - 250,000 hectares The rice sown area in 2014 is expected to stand at around 7.6 million hectares; the production is estimated about 43.4 million tons of paddy rice

Winter Spring rice crop – Bumper harvesting, dropdown price

Photo by Thoi bao Kinh te Sai Gon online

 According to USAD’s rice outlook, Vietnam’s rice production is expected to reach around 27.7 million tons (basis milled) in period 2013-14; area harvested under rice may fall by 62,000 hectares to 7.8 million hectares

in this period from around 7.862 million hectares in the previous year

Vietnam needs 20.5 million tons of rice in 2013-14 for domestic

consumption (www.oriza.com/news/).

 According to the Bloomberg’s news: may be happening the war of price

among rice exported Asian countries including of Thailand, Vietnam & India in next few months because Thailand has reduced by 30% price of

5% broken grade (around $394 per ton) Mr Krishna who are executive director of Kakina company (a biggest long-grain rice export company in India) said that Indian rice must reduced by $20 per ton in order to compete with Thai rice Although the demand of rice in the world predicted to increase by 1.5% (471.2 million tons), the Thailand rice export volume keep increase by 27% at around 8.5 million tons in this year Vietnam also increases by 10%, around 7.5 million tons

 Generally, on March 2014, in the North provinces will affected by extreme

weather (cold air block enter the North) and very low temperature,

especially in Northwest provinces has some small rainfall The rainfall in whole country will be very rare, particularly in Highland and Southern,

drought will be happen and it will affect to agriculture (NCHMF, 2014)

 According to Vietnamnet online: A hailstorm hit Tua Chua Township of the northern mountain province Dien Bien on 21st March, causing damages to

farming activities The storm lasted just 15 minutes, and its lemon-size

hailstones destroyed fruit bearing trees and crops The hailstones could be

seen on provincial roads and house roofs though the downpour let up for

an hour (Source: http://vietnamnet.vn)

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3.1 Weather forecasting on March 2014

 North:

Average temperature will be equivalent to mean of temperatures in 30

previous years The rainfall in the Northwest will be approximately 20-50%

lower than the average rainfall of the same period in recent years In the

Northeast, the rainfall deficiencies will ease in the region, lifting much of this area out of the lowest 50% of 30-month rainfall records for periods last recent years

 Central coastal:

Average temperature in month is equivalent of mean of temperatures in 30 previous years Rainfall in the North central will be below the average rainfall from 20-50% compared to previous period In the South central provinces,

rainfall will also be lower than mean figures of previous months at level of

under 10mm

 Highland and South:

Average temperature in month is equivalent of mean of temperatures in 30 previous years In the highland and Southern provinces, the rainfall

deficiencies will be ease across western at below 10 mm

A hailstorm hit the northern mountain province damage farming

Photo by: NCHMF, 2014

Figure 3 Weather Maps (1st March & 25th March 2014)

Source: Weather online (www.weatheronline.co.uk)

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 In the end of March 2014, the weather will not supportive for agricultural

activities because the drought will expand in the Central coastal region

and Southern of Vietnam The temperature will increase up remarkably

and rainfall will not occur in many provinces in these regions The farmers need to irrigate for new rice crop However, the level of water of rivers in

the Central Highland and Southern decreased by 26-95% compared to the same period last year, causes shortage of irrigated water for rice field

and coffee plantation (Fig.3 & Tab.1)

Table 1 Forecast of average temperature and precipitation on March 2014 in Vietnam

Ord Station

30-years mean of temperature (oC)

Forecast of temperature (oC)

30-years mean of rainfall (mm)

Forecast rainfall (mm)

Table 2 Monthly hydrological forecasting for rivers in the Central highland & Southern

Mean

3rd quarter

2014

Compared to the mean annual stage

Ma Ly Nha Water level

Kon Binh

Tuong

Discharge (m3/s)

Son

Discharge (m3/s)

Cai N.T Dong

Trang

Discharge (m3/s)

Dakbla Kon

Tum

Discharge (m3/s)

Serepok Ban

Don

Discharge (m3/s)

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3.2 Impacts of weather to agriculture

 According to Department of Crops Production, MARD: the rainfall coming late and deficits for few months in summer crops have eased across the

provinces in the Southern and affected to planting area of rice farmers In

the end of March, thousands of hectares of rice in Vietnam’s Mekong Delta region1 are adversely affected by drought and saltwater intrusion

MARD had advised farmers to avoid planting this crop, but most of farmers carried out rice broadcasting and transplanting The experts

predict that average rice yields could drop down 30 to 40% due to salinity

and drought in this crop

 Irrigation is an important activity in summer rice crop to deal with water

shortage but it affects to the cost of production while price of gasoline

was increased up in the last week of March (from 120 dong per liter)

 High temperature and humidity also affect to rice new plants, increase

insects (brown planthopper) and severe diseases As a result, cost of

pesticides expects to increase in this crop (MARD)

global market

4.1 Progress stages, crop conditions

1 The Meko g Delta accou ts for 50% of Viet a ’s total rice productio (around 28 million tons), and for

90% of exports (around 7 million tons).

Rice storage in a private enterprise

Photo: MARD

Rice harvesting in Winter Spring crops in Southern Vietnam

Photo: MARD

 According to report of MARD on February 2014, the farming activities in

the North focuses primarily on the sowing of WS rice crop The sowing

progress is slower compared to the same period last year In the middle

of February, sowing area reaches nearly 776 thousands hectares, by

91.8% compared to previous year The most of rice area concentrated in

Hai Duong (61,000 hectares) and Nam Dinh province (57,000 hectares)

 In the South, most of rice area has basically broadcasted for WS crops and harvest previous crop In MRD, the average yield of WS estimated

around 6.56 tons per hectare, 1 tons higher than that of previous WS

crop Especially, the yield was relatively high in some provinces such as Tien Giang (7.47 tons/ha), Can Tho (7.08 tons/ha), Dong Thap (6.8

tons/ha) and Vinh Long (6.7 tons/ha) Until the middle of February, 1.947

thousand hectares was sown, over 98.4 % of the same period of 2013

(table 3) Of which, around 250 thousand hectares was harvested in MRD

(table 5) Soc Trang, Kien Giang and Dong Thap provinces harvested early and rice price was relative high After harvesting WS crop, the farmers was sowing SA rice crop It estimated around 60 thousands hectares, 75% area of corresponding period of 2013 (MARD)

 MARD: The diseases and insects cause damages in WS & earlier of SA

crop Brown planthopper affected on 97,000 hectares, mainly occurred in

Central (Quang Nam, Binh Dinh, Khanh Hoa) and Southern provinces (Long An, Bac Lieu, An Giang, Dong Thap, Hau Giang, and Kien Giang) Table 3 Rice sowing area in WS crop by region (up to 15th Feb 2014)

Feb.2013 (1,000 ha)

Sowing area to 15 Feb.2014 (1,000 ha)

Compared 2013/14 (%)