Miller Magazine Issue: 130 October 2020

VIetnam 82 MILLER / OCtOber 2020 46 percent of the annual output, concluded in June and the production is officially estimated at 19.9 million tonnes, close to the five‑year average. The area planted is estimated slightly below the previous five‑year average due to dryness and salinity intru- sion in parts of the Mekong River Delta (the country’s main rice‑growing region in the south), but overall yield results were positive. Vietnam is the world's third major rice supplier, af- ter India and Thailand. Rice exports are forecast at 7.1 million tonnes in the 2020 calendar year, close to the 2019 level. Vietnam’s rice exports have expanded during the pandemic to surpass rival Thailand in the price for the first time in three decades. While other agricultural products suffered from a decline in exports due to the impacts of COVID-19, domestic rice ex- port value reached 2.2 billion USD in the first eight months of 2020, up 10.4 percent over the same period in 2019. The Philippines was Vietnam's major buyer until August, acquiring nearly 40% of that volume, while the largest increases in exports were to Senegal, Indonesia and China. According to local exporters, the recent activation of the free trade agreement with the European Union will allow Vietnam to increase rice ex- ports substantially. DOMESTIC PRICES OF RICE AT HIGH LEVELS Domestic prices of rice have been increasing since the beginning of 2020, sustained by strong demand by importing countries. Between March and April 2020, prices of rice surged by 30 percent due to panic buy- ing by households amid the COVID‑19 pandemic and concerns over the impact of dry weather conditions on the 2020 winter/spring output. In June, prices of rice decreased reflecting the improved supplies from the early summer/autumn harvest and a decline in foreign demand. Overall, prices in June 2020 were 40 percent above their year‑earlier levels. DECLINING CORN PRODUCTION Corn is one of several locally produced crops supplied to the feed industry. However, local corn production has not grown on par with local demand and has generally been declining steadily since 2015. This is despite the Vietnamese government rolling out incentive policies to encourage farmers to switch from rice to corn since 2016. Harvesting of the 2020 main maize crop was complet- ed in June and official estimates put this season’s output at a below‑average level of 1.9 million tonnes. The de- crease in production mostly reflects a reduction in the area planted as farmers preferred to grow vegetables instead of maize. In Vietnam, 85 percent of corn is used for feed and industrial production. In the feed industry, corn is a main ingredient in hog, poultry, and livestock feeds. Also, corn is an alternative to feed wheat if its supply is short or its price becomes uncompetitive. Feed wheat is currently less competitive than corn, encouraging feed millers to move away from it for price reasons. ASF OUTBREAKS SEVERELY AFFECTED PIG INDUSTRY The country, which is the fifth-largest producer and con- sumer of pork meat in the world, has been severely affected by several outbreaks of African Swine Fever (ASF) in 2019 and early 2020. According to the latest available official estimates, as of mid‑March 2020, at least 6 million pigs, accounting for more than 20 per- cent of the national herd, have died or have been culled due to ASF. Animal losses have caused a sub- stantial reduction of farmers’ income, rais-