Vietnam’s 2016 drought-hit rice output to fall 1.5 percent: government official

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By Ho Binh Minh

HANOI (Reuters) – Vietnam’s rice paddy output will likely fall this year for the first time since 2005 following the worst drought in 90 years, but the decline will be limited as farmers expand planting in the current and final crops, a government official said.

The Delta’s winter-spring output fell 10.2 percent on last year, but total production could fall just 1.5 percent to 44.5 million tonnes, said Tran Cong Dinh, deputy head of the Agriculture Ministry’s Crops Department.

“So overall the annual paddy output will only be short by 700,000 tonnes,” Dinh told Reuters on the sidelines of an agriculture conference last Friday.

Severe drought and sea water intrusion linked to the El Nino weather pattern in Vietnam’s southern Mekong Delta food basket have destroyed fruit, rice and sugar crops in the world’s third-largest rice exporter after India and Thailand.

Vietnam grows three rice crops annually, of which the winter-spring crop is the biggest and its grain is used mostly for export.

The country, which produced a record 45.21 million tonnes of paddy last year, exports around 30 percent of its output, mainly to China, the Philippines and Indonesia. Production last fell in 2005, also due to drought.

Salination has delayed planting of the summer-autumn crop, and Dinh cautioned that planting of the third crop could be threatened by seasonal floods on the Mekong River.

Weather forecasters have warned of the possibility of a La Nina weather event, the counterpart of El Nino, which could bring intense rains in the second half of 2016.

“Planting will have to be within the dyke system to protect the crop,” Dinh said.

Rice traders said the planting delay meant harvest times will vary in the Delta, which comprises 12 provinces and Can Tho city.

“The harvest will not peak at the same time so prices won’t decline much,” said a trader at a foreign firm in Ho Chi Minh City said.

Vietnam’s benchmark 5-percent broken rice eased this week to $370-$380 a tonne, free on board basis, from $375-$380/tonne last week and a five-month high of $390 on March 25.

Vietnam’s rice exports this year will dip 4.45 percent from 2015 to 6.44 million tonnes, partly due to drought in the Delta, an analyst has said.

(Reporting by Ho Binh Minh; Editing by Richard Pullin)

Copyright 2016 Thomson Reuters. Click for Restrictions.

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