April 25, 2012

Due to the fact that Australia still has a low quality wheat surplus and Vietnam will have higher volumes of rice and cassava exports this year as compared with last year, USDA estimates the use of feed wheat for the local animal feed industry to remain high in marketing year (MY) 2011-12.

Feed wheat's share of total consumption was formerly 15-20%, mainly for use in aqua-feed, as both an ingredient and a binding agent. Feed wheat, however, has recently been an alternative source for other animal feed in lieu of using corn, cassava, and broken rice, due to its price competitiveness.

Despite MARD's plan for setting corn planted area at 1.2 million hectares, Post forecasts the corn planted area in 2012 to reach around 1.1 million hectares. This is due to lower profit margins for corn compared with other crops.

Farmers are now using most of the hybrid corn seeds sold on the market. These seeds can give very high yields in ideal conditions. Corn yields, however, can be significantly reduced from damages caused by pests (weeds, worms, etc.). The use of genetically modified (GM) corn varieties is expected to bring higher output and profits to farmers, not only due to higher yields as a result of hybridisation, but also due to the reduced input costs of pesticides, herbicides, and labour.

MARD is now conducting large scale field trials of GM corn varieties in both the northern and southern parts of Vietnam. According to MARD officials, the final approval for commercial GM corn production is expected to be announced between 2012 and 2013.

Since last year, MY 2010-11, the government called for a programme to increase paddy rice production by one million tonnes, to be accomplished by expanding another 100,000 hectares of Late Autumn planted area in the Mekong River Delta.

According to MARD, this will provide higher profit margins to MRD farmers since the selling price during that period is relatively high compared with other periods. However, the Autumn planting coincides with annual flooding in the Mekong River Delta.

MARD requested support from the Prime Minister to build new dikes and reinforce existing ones for long-term protection of the crop on those additional 100,000 hectares. This rice area expansion is currently the main factor for the increase in Vietnam's total rice production.

Vietnam topped its MY 2009-10 export record of 6.73 million tonnes with a new record of seven million tonnes in MY 2010-11. The Vietnam Food Association's report showed that Vietnam exported 7.1 million tonnes of rice in MY 2010-11, bringing the export value to over US$3.5 billion, an increase of more than 20% over the MY 2009-10 export value. The values are on FOB basis. The average export price for Vietnamese rice in MY 2010-11 was calculated at US$493 per tonne. The average export rice price in MY 2009-10 was US$479 per tonne, while the price in MY 2008-09 was US$406 per tonne.