Vietnam is to raise rice exports as it tries to maximise the benefits of rising global prices while, at the same time, guaranteering domestic supplies. The world’s second biggest rice producer raised its 2008 export target from four million to 4.5 million tonnes. Rice inflation has made it more profitable for farmers to grow more.
The move is a change of policy by the government as Nguyen Tan Dung, the country’s prime minister had been reluctant to raise exports until now because he feared domestic supplies to raise exports untill now because he feared domestic supplies would be jeopardised. The price of rice traded on the Chicago Board of Trade has jumped by 75 per cent over the past year.
Asia’s key rice producers have had to weigh up the needs of their own people, such as the amount and cost of rice available, and global demand for the staple crop.
The government wanted to bring domestic prices down and secure its supply in the face of rising inflation, which hit 25 per cent last month. Analysts said that increasing exports could reassure world markets. ” The move perhaps could even help the global prices calm down a bit,” said Jonathan Pincus, economist at the United Nations Development Programmme.
But it is these high prices that encourage farmers to plant and harvest more rice. Vietnam earned $1.2 billion from exports in the first five months of the year, an increase of 94 per cent over the same period last year. The government said rice production wolud rise by one million tonnes to 37 million this year. ” it is very attractive to export now and Vietnam certainly wants to earn that export revenue,” said Pincus.