Vietnam to Cut Rice Exports

By Associated Press
March 28, 2008

HANOI, Vietnam - Vietnam will cut rice exports by 1 million tons this year as part of the government's efforts to rein in soaring inflation and ensure food security, the government said Friday.

"To stabilize food prices, rice exports this year must not exceed 3.5 million tons," Prime Minister Nguyen Tan Dung was quoted as telling a government meeting Thursday.

But Vietnam's moves are reflected elsewhere as the cost of rice increases worldwide as part of a surge in global food costs.Rice prices on world markets have jumped 50 percent in the past two months. Experts blame rising fuel and fertilizer expenses as well as crops curtailed by disease, pests and climate change.

A sharp rise in the price of rice is hitting consumer pocketbooks and raising fears of public turmoil in the many parts of Asia where rice is a staple.

The higher prices have already sparked protests in the Philippines, while Cambodia banned exports this week to curb rising prices at home.

The U.S. Department of Agriculture forecasts global rice stocks for 2007-08 at 72 million tons, the lowest since 1983-84 and about half of the peak in 2000-01.

The higher prices are stretching the budgets of aid agencies providing rice to North Korea and other countries, particularly with donations already falling.

The Vietnamese prime minister also instructed local rice exporters not to sign new export contracts, the government said on its Web site.

Huynh Minh Hue, vice general secretary of Vietnam Food Association said the measure was needed to fight soaring inflation and ensure food security.

The sharp price increase in rice exports is partly driven by strong demands from countries to boost their own stocks for food security, Hue said.

In the first quarter of this year, Vietnam exported more than 800,000 tons of rice. Last year, Vietnam, the world's second largest rice exporter, exported 4.5 million tons of rice.