Vietnam’s rice industry came out of nowhere. The Economist has a neat article titled, “From Basket Case to Rice Basket” that you might find interesting. I highlight it now because it’s exactly what I found on my trip to Vietnam.

On April 1, 2008, I landed in the second-largest rice-exporting nation in the world. This wasn’t always the case, though. Vietnam is a communist country that, up until recently, practiced farm collectivization. In other words, most of Vietnam’s crops went to the government first.

But since that policy has been reformed, Vietnam has hit the main stage, and is now second only to Thailand in rice exports.

It’s a perfect time to be talking about rice, too, with prices skyrocketing. I’m sure you’ve read the articles… In March, food prices were 30% higher than they were a year ago.

Now, some countries are on the defensive. Vietnam, in particular, is cutting its rice exports by more than 20%. The country thinks high food prices could mean hunger at home, so it wants to make sure it’s got a good supply.

But a 20% cut in exports means 80,000 metric tons, or 176.4 million pounds, of rice are taken off the world market.

Unfortunately, this means rice prices could climb even higher. All you commodity traders should be watching the charts very carefully.

Sara Nunnally
Editor, Taipan Trader

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