Vietnam lifts crop export hopes despite drought

Vietnam is to raise its exports of agricultural products by $1bn this year, despite calling time on a trend of rising rice shipments.

The world's second biggest rice exporter is targeting exports of 5.5m tonnes this year, down from a record 6m tonnes in 2008.

The reduction follows a drought, blamed on the El Nino weather pattern, which has hit the rice areas in northern Vietnam, and where rainfall "will continue to decrease by 20-30%", according to state weather forecasters.

The dearth of rain has left the Red River, which runs through Vietnam's capital, Hanoi, at its lowest in more than a century, state media have reported.

Nonetheless, Vietnam, said it would export $16bn of farm products this year, compared with $15bn in 2009, with the country's agriculture ministry signalling hopes of robust rice prices.

The market may face a squeeze from a potentially significant rise in import demand, at a time when major producing countries may reduce growing areas, and keep more exportable grain to guarantee domestic supplies.

Thailand, the world's biggest exporter, targeted rice exports of "at least" 9m tonnes this year, leaving them potentially well short of the 10m tonnes that analysts including US Department of Agriculture staff have forecast.

Vietnam is also the biggest producer and exporter of robusta coffee beans, with production estimated by BNP Paribas Fortis at 1.1m tonnes in 2009-10 compared with 750,000 tonnes Brazil, the biggest producer of arabica beans.