Rice exports from Vietnam, the second-largest shipper, reached a record level, boosting supply at a time when floods and government policies may reduce flows from Thailand, the largest exporter.
Shipments totaled 6.84 million metric tons in the year through Dec. 8, the Vietnam Food Association said today. That's more than the 6.75 million tons shipped in the whole of 2010, the previous peak, its website showed. Full year exports may reach 7.37 million tons, the agriculture ministry said Nov. 30.
More shipments from the Southeast Asian country may further cut prices of the staple for half the world, and pressure United Nations-monitored food costs that have declined more than 9 percent from a record in February. Global output will climb to a record for a second year in 2011 as bigger harvests in China and India outweigh supply disruptions in Pakistan and Thailand from floods, the UN's Food and Agriculture Organization said Nov. 11.
"We shipped more rice this year due to an increase in demand for Vietnamese rice from international markets such as Indonesia, where bad weather caused a drop in rice output, from Bangladesh and from China, as well as African countries," Huynh Minh Hue, general secretary of the Vietnam Food Association, said by phone before the data was released.
The association uses final loading data to compile export figures, compared with those from General Statistics Office and Vietnam General Customs Department, which are calculated from bills of lading, Hue said in a Dec. 7 interview. According to GSO and Customs, Vietnam exported 6.89 million tons in 2010.
Futures have dropped 24 percent on the Chicago Board of Trade since Sept. 12, when concerns that flooding in Asia may cause a shortage pushed prices to their highest in almost three years. Rough-rice for delivery in January gained 0.8 percent to $14.115 per 100 pounds at 12:07 p.m. in Singapore.
The price of 100 percent, grade B Thai rice for export, a weekly benchmark for Asia, climbed to $663 per ton on Nov. 16, the highest level since October 2008. It has surged 21 percent since Prime Minister Yingluck Shinawatra won an election in July on pledges to raise rural incomes.
Thailand has implemented a state rice-buying policy at guaranteed prices since Oct. 7, even as the worst floods since 1942 wreak damage on farms. Monthly exports from Thailand could drop to 500,000 tons from November to January, half the average of the first nine months of 2011, Chookiat Ophaswongse, Thai Rice Exporters Association's honorary president, said Nov. 3.
Improved quality and stability of deliveries have also made Vietnamese rice more competitive compared with supplies from Thailand, said Hue. Demand from Bangladesh, China, Indonesia, Iran and Africa may drive the global rice trade to a record 34.3 million tons this year, according to the FAO.
Vietnam "hopes" that exports could for the first time jump above 7 million tons, Bui Ba Bong, deputy minister of agriculture and rural development, said Oct. 20.
Export growth has accelerated at a faster pace than production, which may limit further increases in shipment volumes, said Darren Cooper, a senior economist at the International Grains Council in London. Output has risen by just over 10 percent since 2006-2007, while exports grew nearly 50 percent during the same period, he said Nov. 3.
In the absence of any "marked" fall in domestic demand, or a big increase in production, it seems unlikely that exports can increase much more, he said.
Exports may reach 7.2 million tons in 2012, the government said in a statement on its website Oct. 5, citing the Ministry of Agriculture and Rural Development. The country may produce 41.5 million tons of unmilled rice next year, compared with estimated output of 41.6 million tons for 2011, it said.