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Vietnam to cut rice exports this year

HANOI: Vietnam will cut rice exports this year in an effort to secure domestic supplies and stabilise skyrocketing food prices now driving double-digit inflation, the government said on Friday.

The communist government also cut its economic growth target to 7.5 percent for this year — down from last year’s 8.5 percent and an earlier target of up to nine percent for 2008 — and announced a 10-percent cut in public spending.

Prime Minister Nguyen Tan Dung has capped exports of the staple grain rice at 3.5 million tonnes this year, down from a previous target of 4.5 million tonnes, said a statement on the government’s official website.

Vietnam is the world’s second largest rice exporter and its farmers have benefited from fast-rising grain prices on the international markets, but domestic consumers have suffered as prices have shot up. Amid low global stocks and high prices, the Philippines has secured a commitment from Vietnam for 1.5 million tonnes of rice this year, barring natural disasters or unexpected harvest losses, its agriculture ministry said.

Inflation in Vietnam has topped 16 percent in the first quarter, government data showed this week, in a trend that has fuelled popular anger and an ongoing spate of labour strikes in the country of 86 million people.

Vietnam’s government, in a top-level meeting on fighting inflation and other economic woes, decided to freeze prices of 10 essential goods until June, also including electricity, coal and retail fuel, the website said.

The Vietnam Food Association has tightened rules on rice export contracts, telling exporters they must not exceed the average of the past two years. “The regulation aims to find a better balance between production and exports, so as to balance local prices and guarantee food security,” said Huynh Minh Hue, deputy general secretary of the association.

In the first quarter of 2008, Vietnam exported 859,000 tonnes of rice worth 366 million dollars, up 5.3 percent in quantity and 42.6 percent in value, according to the state-run General Statistics Office.

The government meeting this week also discussed Vietnam’s other economic challenges — including a widening trade deficit, a falling stock market, and lower growth projections for the year.

“We are facing quite a bad situation,” said Deputy Prime Minister Nguyen Sinh Hung, according to news website VNExpress. “The world economy is declining, but we have to be calm.” Hung said the government will require ministries and agencies to economise, cutting about 10 percent of regular spending, the report said.

“These economic difficulties will last for about one year and we have to accept high inflation levels ... In the current situation I think reaching economic growth of 7.5 percent for the year would be high.” afp

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