Vietnam Rice Report – April 2014 Vietnam Agricultural Report Research

Vietnam Rice Report – April 2014

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: 4 th April 2014. Submission of full report: 8th April 2014.

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Vietnam Rice Report – April 2014

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

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Vietnam Rice Report – April 2014

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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Vietnam Rice Report – April 2014

1. Introduction 

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.

2. Hot topics of the month 

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.

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Vietnam Rice Report – April 2014 

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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Vietnam Rice Report – April 2014 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.

Winter Spring rice crop – Bumper harvesting, dropdown price Photo by Thoi bao Kinh te Sai Gon online.



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.

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Vietnam Rice Report – April 2014 

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.

3. Weather condition and its impacts to rice production 

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 21 st 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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Vietnam Rice Report – April 2014

A hailstorm hit the northern mountain province damage farming Photo by: NCHMF, 2014

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.

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Vietnam Rice Report – April 2014

Source: NCNMF, 2014.

Source: NCNMF, 2014.

Figure 2. Forecast of temperature mean on March, 2014

Figure 1. Forecast of precipitation mean on March, 2014

Figure 3. Weather Maps (1st March & 25th March 2014) Source: Weather online (www.weatheronline.co.uk)

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Vietnam Rice Report – April 2014  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)

1

Sơn La

20.0

19.5-20.5

40

10-20

2

Hà Nội

20.2

20.0-21.0

44

15-30

3

Hải Phòng

19.1

19.0-20.0

48

15-30

4

Thanh Hóa

19.8

19.5-20.5

41

15-30

5

Vinh

20.3

20.0-21.0

47

15-30

6

Huế

23.1

22.5-23.5

47

15-30

7

Đà Nẵng

24.1

23.5-24.5

22

5-15

8

Nha Trang

25.8

25.5-26.5

32

10-20

9

Buôn Ma Thuột

24.7

24.0-25.0

22

29%

90

> 86%

6,2

< 82%

2,5

< 91%

88,2

> 94%

70

> 94%

80

< 15%

78

> 5,4%

171 cm

>55cm

150cm

>47cm

5cm

57cm

Hmin

-4cm