Vietnam to see largest drop in rice output in 3 years

By Ha Phuong   August 12, 2016 | 07:32 pm PT
The world’s third largest exporter of rice (based on volume) is forecast to be 1.8 million tons behind Thailand, the second largest exporter.

This follows a shortfall in rice production. The 2016 season in the Southeast Asian country has been hindered by the historic drought caused by El Nino weather pattern which led to the worst salt water intrusion in a hundred years.

Vietnamese officials estimate that during the first seven months of this year, over 500,000 hectares of crops were damaged, half of which grew rice.

Vietnam's paddy output is projected to experience a downfall of 1.6 percent on-year, said the U.N. Food and Agriculture Organization (FAO) in its July rice market report. Much of this loss concentrates in the Mekong Delta, which normally accounts for over half of the country’s output.

However, Vietnam is not the only country facing the decrease in output volume. Production is anticipated to decline in some other Asian countries including Indonesia and Malaysia due to adverse weather, down 1.5 percent and 3.5 percent respectively.

Due to the slip in rice production, the country’s export volume by the end of 2016 is expected to decrease by 5 percent compared to last year.

Even the fact that Vietnam stands among the top rice exporters of the world (3rd in volume export and 5th in value export in 2015), the limited sophistication of small-scale farmers, which lowers the quality of the rice, makes the country’s rice relatively less competitive, said the Vietnam Trade Promotion Agency.

The price of Vietnamese 25% rice is relatively low compared to its Thai and Indian equivalents. Vietnamese rice's export value last year stood at $1.6 billion, accounting for 7.5 percent of the world’s total.

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