Vietnam sees record rice, coffee exports in 2011

HANOI: Vietnam is on track to export record quantities of rice and coffee this year thanks to rising output and strong overseas demand, and revenue growth from shipments in the first eight months has helped trim the country's chronic trade deficit.

The Southeast Asian country, which is the world's second-largest coffee producer after Brazil and second-biggest rice exporter after Thailand, is having bumper harvests this year but thin coffee stocks have affected export flows.

Coffee exports between October 2010 and August 2011, the first 11 months of the 2010/2011 crop year, rose 13.6 percent from a year ago to a record high of 20.8 million 60-kg bags, the General Statistics Office (GSO) said on Thursday.

However, in August alone Vietnam only shipped an estimated 40,000 tonnes, or 670,000 bags, a fall of 49 percent from the same month last year, the GSO said in a monthly report, and well below market expectations of 65,000-70,000 tonnes.

Vietnam's coffee crop year starts in October and ends in September, while GSO data is based on the calendar year.

After deducting exports, Vietnam may have around 1 million 60 kg bags of coffee left in stock now, more than a month before the next harvest may start, based on traders' 2010/2011 output estimates of some 22 million bags.

At least 70,000 tonnes of coffee shipments from Vietnam have been delayed or not delivered since July after stocks fell ahead of the harvest and strong prices prompted farmers and shippers to renegotiate contracts, dealers in Singapore and Hong Kong said.

The next harvest could bring in up to 24 million bags, based on foreign traders' projections.

The government has forecast stable coffee exports this year of between 1.15 million and 1.2 million tonnes.

RECORD RICE

Rice and coffee, which are produced by millions of farmers from the northern Red River Delta to the Mekong Delta in the south and the Central Highlands, have brought in a combined $4.71 billion in the first eight months.

In 2010 Vietnam shipped a record 6.83 million tonnes of rice and 1.17 million tonnes of coffee, just below the 2009 record 1.18 million tonnes.

It could ship between 7.5 million and 8 million tonnes of rice this year following an expected rise in annual output, the state-run Vietnam Economic Times reported on Thursday.

A Vietnam Food Association official made the projection based on an Agriculture Ministry estimate that paddy output could rise to 41.6 million tonnes, the newspaper said.

The most recent government forecast is 41.02 million tonnes, which would be a record high, beating last year's record of 40 million.

Rice is the staple food in the country of 87 million people. Agriculture contributed 16 percent of GDP last year.

The latest projections on rice output and exports were released at a news conference by the trade ministry to address concern over a recent rise in domestic rice prices and Vietnam's rice stocks.

Rice prices in Vietnam have risen above those in Thailand for the first time in years and the increase has forced Vietnamese exporters to default on around 200,000 tonnes, according to Thai traders, although traders in Vietnam are keeping quiet about the problem.

"It appears that the government wants to cool the price rise as it has affected inflation," an industry analyst said, citing industry rejections of several reports on new rice deals at a trade ministry news conference on Wednesday, to which foreign media were not invited.

Annual inflation accelerated for a 12th straight month in August, hitting 23.02 percent, although economists said prices may have peaked.

Rice exports between January and August rose 6.5 percent from the same period last year to an estimated 5.31 million tonnes, and revenue from rice increased 11 percent to $2.6 billion, the GSO said.

That revenue, plus $2.11 billion from January-August coffee exports, helped narrow Vietnam's trade deficit in the period to $6.21 billion from $7.53 billion in the same period last year.

Copyright Reuters, 2011