Vietnam 2010 rice output to edge up, Q1 exports plunge

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Vietnam's main rice crop could be slightly higher this year, according to a government report, but official figures showed that exports dropped by nearly a third in the first quarter on thin demand.

Ample supplies were arriving from the main winter-spring rice crop in the Mekong Delta but foreign buyers were scarce, which suggested prices would fall further in the early part of the second quarter.

Vietnam is the world's second-largest grain exporter after Thailand.

Paddy rice output from the Mekong Delta winter-spring crop, the country's main source of grain for export, could edge up 1.2 percent this year from 2009 to 9.9 million tons, a government report said on Friday.

But rice exports in the first three months of this year dropped an estimated 30.7 percent from a year earlier to an estimated 1.23 million tons, the government said.

Rice prices in top exporting countries Thailand and Vietnam may fall more as the Philippines may not tender for new supplies until after national polls in May, sources said last Friday.

Reflecting those lower domestic prices, the Vietnam Food Association cut the floor on rice export prices this week to $400 a ton for the 5 percent broken grain. The Planning and Investment Ministry's preliminary report, obtained by Reuters, on the crop in southern Vietnam said output would rise as the yield increased slightly to 6.38 tons per hectare from 6.36 tons last year.

"The weather for the Mekong Delta's winter-spring crop has been relatively favorable for rice plants' growth," the report said.

The Mekong Delta produces 54 percent of Vietnam's paddy output but supplies 90 percent of exportable grain for the world's second-largest rice exporter.

The ministry report played down the impact of a serious drought in the southern region but said "some localities in the region had lower yields due to the intrusion of salt water".

The winter-spring rice harvest in the Delta is expected to end in the middle of April as usual.

Low import demand, especially from the top buyer, the Philippines, could hurt prices.

Paddy prices in the Delta eased to VND3,800-4,400 (19.9-23.1 U.S. cents) per kg this week from VND3,900-4,400 last week, although a plan to expand a stockpiling scheme by half to 1.5 million tons has kept prices from falling significantly.

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