RI is Vietnam's top rice market

RI is Vietnam's top rice market

Bloomberg, Hanoi

Indonesia took over from Iraq as the top market for Vietnamese
rice last year, after war in the Middle East cut purchases from
what was Vietnam's biggest market in 2002, according to the U.S.
Embassy in Hanoi.

Vietnam, the world's fourth-biggest rice exporter based on
U.S. figures, shipped at least 837,050 metric tons to Indonesia in
2003, according to a report by the embassy's agricultural attache's
office. The figure is up by one-eighth from Vietnam's exports to
Indonesia in 2002 of at least 740,900 tons, based on U.S.
figures.

Iraqi rice imports from Vietnam tumbled more than three-fifths
last year to at least 336,520 tons, as overall Iraqi rice purchases
slid by two-fifths, according to U.S. figures. Vietnam was able to
make up for some of the loss by boosting its share of the
Indonesian market at the expense of Thailand, the world's biggest
rice exporter.

"Vietnamese rice has a price advantage over Thai rice, and
that was an important factor in Vietnam's expansion in the
Indonesian market," said Henry Schmick, the agricultural attache
at the U.S. Embassy in Hanoi.

The average export price of 25 percent broken-grain Vietnamese
rice during the first 10 months of last year was US$164 per ton,
compared with $175 per ton for the same quality of Thai rice,
according to the Food and Agriculture Organization of the United
Nations.

The trend has held into early this year, according to the U.S.
Department of Agriculture.

"Since last month, Thai export price quotes increased,
largely due to the strengthening of the Thai baht," the U.S.
Department of Agriculture said in its January "Rice: World
Markets and Trade". "In Vietnam, with virtually no exportable
supplies, export price quotes have generally moved sideways over
the past few weeks."

Vietnam's ability to tap into the Indonesian market -- the
world's biggest -- may be hampered this year by a ban on rice
imports that Indonesia's government put in place this month, the
agricultural attache's report said. The ban may last until May,
according to the report.

"With record production and ample domestic supplies,
Indonesian rice imports are estimated to drop 1 million tons to 2
million in calendar year 2004," the U.S. Department of
Agriculture said.

The Philippines, the second-biggest market for Vietnamese rice
in 2003 with imports of at least 499,740 tons, will also probably
cut its imports this year, the U.S. Department of Agriculture said.
The department estimated that overall Filipino rice imports will
decline 23 percent this year, while the Philippines' National Food
Authority has put the decline at a maximum of 10 percent.

"Based on the temporary ban in Indonesia and market changes
in the Philippines, it's going to be very challenging this year for
Vietnam to find markets," said Schmick, the U.S. agricultural
attache in Hanoi. "Vietnam will have to find newly emerging
markets in places like Africa."

Vietnam's rice exports to Africa more than doubled last year
to at least 801,050 tons, the U.S. report said. Markets for
Vietnamese rice in Africa included Senegal, Ghana, Tanzania, Angola
and Rwanda.

The U.S. Department of Agriculture's final export figures for
2003 show that India and the U.S., the world's second- and third-
biggest exporters in 2002, probably held off challenges from
Vietnam to retain their positions on the global rice shipment
tables.

Vietnamese rice exports rose 17 percent last year to 3.8
million tons, according to the U.S. Department of Agriculture. The
U.S. agricultural attache's office, which uses different figures,
put Vietnam's exports last year at 3.87 million tons.

Meanwhile, Indian exports fell 34 percent in 2003 to 4.4
million tons, while American shipments rose 17 percent to 3.85
million tons, the U.S. Department of Agriculture said.

The drop in demand from Indonesia and the Philippines will
probably cut Vietnamese exports to 3.5 million tons this year, the
Hanoi agricultural attache's report said. Even with the decline,
Vietnam would move past both India and the U.S. in 2004, based on
U.S. Agriculture Department estimates.