Vietnam's farm produce exports pick up

2005-11-24 From Topix

During the past 10 months, the total export turnover of 10 key farm products reached US$6.636 billion, fulfilling 91.53 percent of the whole year?ˉs plan and representing an increase of 25 percent against the same period last year. Notably, rice exports enjoyed high growth with an export volume of 4.6 million tonnes, earning US$1.237 billion in 10 months.

In general, farm produce exports have gained high prices this year. Total export volume increased by 20.1 percent and total export turnover rose nearly 25 percent against the same period last year. In spite of calamities and difficulties in markets for other essential products such as tea and rubber, the export of farm produce has attained high growth in 2005.

Good earnings from exporting farm products have given a strong boost to production. In addition, the development farm production technology has made greater contributions to the nation?ˉs economic growth rate and become an important factor in increasing the incomes of people living in rural areas. It has also helped to raise the wholesale rate and service revenue over the past 10 months to a record figure since 1997, an increase of 19.1 percent against the same period last year.

Accordingly, the country is expected to fulfil the economic growth rate target of 7.5 percent per year for the five-year plan (2001-2005).

Farm produce for export will continue to increase in 2006 due to the following predictions.

First, next year will continue to be the bright year for farm produce, according to cycles in the world?ˉs markets.

According to recent statistics from the World Trade Organisation (WTO), since 1993, food price rises have been reported for fours consecutive years, from 1994 to 1997. The current soaring price of food has lasted for just two years. Therefore, rising prices for agricultural products are likely to be maintained in 2006 because the current two-year period is not long enough for global markets to encourage the development of agricultural production that can lead to supply exceeding demand, thus decreasing the price of agricultural products.

In addition, it is impossible to reduce the price of rice on the global market in 2006. According to recent forecasts by the US Agricultural Department, the world?ˉs total rice output in 2005-2006 crops will increase by 1.1 percent, reaching 405.285 million tonnes, while total rice consumption on the global market will grow by 0.1 percent to reach 413.577 million tonnes. Hence, despite soaring rice output, supply cannot surpass demand.

For many years, the rice volume in stock at the end of crops has been reducing sharply. According to estimations from the US Agricultural Department, the rice volume in stock at the end of the 2002-2003 crops reached 109.712 million tonnes. The figure fell to 83.678 million tonnes in the 2003-2004 crops and continued to drop to 68.047 million tonnes in the 2004-2005 crops. This shows a decrease of around 38-percent (equivalent to 41.665 million tonnes) in two yearly crops. Therefore, although the world?ˉs rice output constantly increased during the past two yearly crops, the rice volume in stock at the end of the crops did not improve, so the rice price on the global market is unlikely to reduce in the year to come. This poses a great concern for international community about the key agricultural product that feeds more than half the world?ˉs population.

In summary, Vietnam will have more advantages in exporting agricultural products. This is an important source that helps Vietnam achieve high economic growth targets as the country implements the current five-year plan from 2006 to 2010. Therefore, proper investment in this field is an essential step at present.