Wednesday, April 16, 2008

Fresh Vietnamese rice to hit market a month early

CAN THO, Vietnam, April 16 (Reuters) - Fresh rice from Vietnam's summer crop could start hitting the market a month earlier than usual, a top exporter said on Wednesday, bringing some relief to importers edgy over inflation and food security.
"Farmers started planting their early summer-autumn crop in early April, using the high-yielding varieties so paddy can be ready for export from mid-June," Managing Director Nguyen Trung Kien of Can Tho city-based Gentraco, one of the 10 largest Vietnamese rice exporters, told Reuters in an interview.
Farmers normally deliver the summer-autumn crop, the second-largest of Vietnam's three annual crops, in mid-July.
The early supplies could help temper prices, which have more than doubled this year for benchmark Thai white rice after export curbs by major suppliers -- including Vietnam -- triggered a rash of restocking and panic buying by governments and importers.
Vietnam, the world's second-largest exporter of rice after Thailand, extended its ban on signing new export contracts all the way through June this year in an effort to control double-digit inflation, which hit 19.3 percent in March.
For more on export curbs click: [ID:nSP35467]
Rice prices in Vietnam have risen 17 percent so far this year and are 51 percent higher than a year ago.
Farmers in the Delta, which produces about 60 percent of Vietnam's rice, are set this year to boost production by 2.4 percent to 21 million tonnes this year after being encouraged to plant a bigger third crop, the Agriculture Ministry has said.
But those supplies may only offset a dip in output elsewhere, Kien warned.
"Overall the only concern is over food shortage in the north or the central regions while the south is never short of rice," said Nguyen Trung Kien, a 34-year-old CEO who has been with Gentraco for more than a decade after studying finance and business management.
A severe cold spell early this year has damaged part of Vietnam's northern crop while the central region, which is not a key rice growing area, is monitoring its first storm of the year. Officials said on Wednesday that the tropical storm was not expected to affect rice and coffee production. [nHAN96500]
"Vietnam will have sufficient rice for domestic consumption and export this year," Kien said in his one-storey company headquarters on the outskirts of the southern city of Can Tho in the Mekong Delta.
In Can Tho, the central market for all of the Delta's products from paddy to soybean to fruits, motorised boats traveling along waterways in-between two-week old green paddy plants, deliver loads of rice bags after a bumper winter-spring crop to exporters' warehouses.
Kien said farmers have slowed grain sales to buying agents who in the supply chain would take the grain to mills for unhusking before selling them to exporters.
Vietnam will produce 36 million tonnes of paddy this year, slightly above 35.86 million tonnes last year when it exported 4.5 million tonnes of husked rice, industry reports said.
Gentraco has projected its rice output to rise 22.8 percent to 350,000 tonnes this year for both export and domestic sales.
The company, which sold all 10 percent of state-owned shares in its 2006 initial public offering, also imports corn and soymeal and distributes oil products and mobile phones.
Five percent of its shares went to Vietcombank, Vietnam's third-largest lender. It was issuing new shares to existing shareholders to raise funds for a $1.3-million high-quality rice processing factory, Kien said.
"We planned to list shares late this year if market conditions are favourable, but otherwise we would aim for the middle of 2009," he said. (Editing by Jonathan Leff)
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