DHAKA: Bangladesh is finalising deals with Vietnam and India to import a total of 330,000 tonnes of rice as it races to replenish reserves and cool domestic prices, two officials with direct knowledge of the matter said on Monday.

Soaring prices of the staple grain for the country’s 165 million people pose a problem for the government, which plans to expand cut-price rice sales to help people hard-hit by high costs.

The south Asian country will buy 100,000 tonnes of parboiled rice from an Indian public sector firm and 200,000 tonnes of parboiled rice and 30,000 tonnes of white rice from Vietnam, the government officials said.

The price for the parboiled rice from Vietnam will be $521 a tonne and white rice $494 a tonne, said the officials, speaking on condition of anonymity because the deals have not been made public.

The price for rice from neighbouring India will be $443.50 per tonne via seaports and $428.50 per tonne via railways, the officials said. All the prices included freight, insurance and unloading costs, they said.

“Preparations are underway to sign the deals soon,” one of the officials said, adding the rice would be delivered within two to three months after the signing.

The Bangladesh government is also holding talks with Myanmar to import rice, the officials said, putting aside a rift over the Rohingya refugee crisis.

Bangladesh this week slashed import duty on rice to 15% from 25%, cutting it for the second time since July in a bid to boost private imports.

Its private rice import plan, however, faces a setback with only 36,000 tonnes bought since July, after the government allowed private traders to import nearly 1 million tonnes of the staple grain after slashing duty to 25.0% from 62.5%.

The government will begin selling rice at a cheaper rate for 5 million poor families and expand such sales from September, in an effort to rein in surging domestic prices, which saw yet another uptick after it hiked domestic oil prices early this month.

Bangladesh, traditionally the world’s third-biggest rice producer with around 35 million tonnes annually, uses almost all its production to feed its people. It still often requires imports to cope with shortages caused by floods or droughts.

23 July 2022, VN: Vietnam trade counselor in UK Mr. Nguyen Canh Cuong said that Vietnam ranks 15th among rice exporting countries to the UK with a market share of only 0.42%.

The room for Vietnamese rice in the UK can also be expanded thanks to the 100,000 people of Vietnamese origin and thanks to the UK-Vietnam Free Trade Agreement (UKVFTA) tariff quota regulation. To turn this potential into reality, rice growers and rice exporters need to thoroughly apply Global GAP on a large scale, and at the same time promote the production of high-quality fragrant rice.

On the side of the Department of Crop Production (MARD) and local authorities with large areas of rice land, it is necessary to implement programs to support farmers in rice varieties, safe agricultural materials, milling and rice storage before exporting. In particular, rice exporters need to understand the tastes and needs of rice consumption in the UK market.

Regarding sustainable rice export solutions, Deputy Minister of Agriculture and Rural Development Phung Duc Tien informed that the rice industry is being promoted to restructure in the direction of promoting value and sustainable development with a focus on solutions and methods to improve the quality and value of Vietnamese rice.

Therefore, in the coming time, the Ministry of Agriculture and Rural Development will coordinate with localities and businesses to focus on building a brand for Vietnam’s rice industry, and at the same time continue to implement mechanisms, policies and solutions to build complete rice value chains.

Along with that, promoting the attraction of financial resources, application of science and technology, towards building a modern and sustainable development of Vietnam’s rice industry with high-quality rice production chains, such as: SRP, GlobalGAP, VietGAP…

In order to achieve the goal of rice export of 6.3 million tons, worth 3.3 billion USD, Deputy Minister of Industry and Trade Tran Quoc Khanh suggested that the Vietnam Food Association and rice exporters need to ensure the purchase of rice for farmers, do not let the rice output clogged after harvest.

HANOI, VIETNAM – Abnormally cold weather, unseasonable rains and rising input costs led to a decrease in spring rice planted area and production in Vietnam, according to a Global Agricultural Information Report from the US Department of Agriculture’s Foreign Agricultural Service (FAS).

The report estimated that spring harvested area fell by 10,000 hectares from an estimate earlier this year to 3 million hectares and production declined from 20.5 million tonnes to 20.1 million.

FAS forecasts total 2021-22 rice output at 43.31 million tonnes, revised down from 43.73 million tonnes earlier in the year.

“Abnormally cold weather in the first quarter of this year and uneven rain distribution affected yields of the spring crop in the northern region,” FAS said. “Unseasonable rain has also not been beneficial for the spring crop in the southern region, reportedly affecting the harvest pace and kernel quality in some areas.”

The report also noted that Vietnamese farmers tend to reduce their use of fertilizers and pesticides when prices are consistently high, which can lead to lower yields.

TOKYO: ST25 rice, a type of Vietnam’s fragrant rice that won the title of best rice in the world in 2019, gained access to the Japanese market.

Vietnam’s leading service provider of agricultural products, Tan Long Group JSC in collaboration with Japanese bank based in Tokyo, Kiraboshi Bank held a ceremony in Tokyo on Thursday to introduce ST25 rice to the Japanese market, reported Vietnam News Agency.

Vietnamese Ambassador to Japan Vu Hong Nam appreciated the two sides’ efforts to bring the grain to such a high-standard market like Japan.

Vietnam is one of the world’s leading rice exporters, and the country’s grain has been available in more than 100 markets over the world, and it is the first time the ST25 rice has been shipped to Japan.

The diplomat expressed hope that more varieties of Vietnamese rice will be able to approach this choosy market, adding that the country must meet over 600 technical standards to bring ST25 into Japan.-Bernama

the transition to organic farming has emerged as an effective solution for the Mekong Delta province of Bac Lieu to cut costs and promote sustainable agricultural production.

Bac Lieu (VNA) – The transition to organic farming has emerged as an effective solution for the Mekong Delta province of Bac Lieu to cut costs and promote sustainable agricultural production.

The province is believed to have what it takes to expand organic farming as it is home to more than 40,000 hectares of agricultural areas cultivated under the “Fragrant rice – Clean shrimp” production model that applies organic practices.

Ba Dinh Cooperative in Vinh Loc A commune in Hong Dan district is among the pioneers of organic rice farming. All members of the cooperative have adopted the integrated rice-shrimp farming model, said its director Nong Van Thach, adding that they focus specially on organic practices for rice cultivation.

With the expansion of the model, farmers have been encouraged to shift to more environmentally-friendly production to reduce costs, increase productivity and product quality, and increase their earnings.

Farmers have received support from local authorities, especially the provincial agricultural extension centre, to scale up climate-resilient, organic rice areas, and also from businesses to access supplies of quality input materials like seeds, fertiliser and biopesticides, and to distribute their products.

An alliance of “Fragrant rice – Clean shrimp” cooperatives has been established in the province with 21 cooperative members who are enabled to participate in sustainable value chains.

Milled-rice exporters said major European buyers have increased their orders from Cambodia and Thailand in 2022 after they discovered that Vietnamese milled rice contained high levels of agrochemicals, which exceeded EU food safety limits.

This was despite a free trade agreement (FTA) between the EU and Vietnam, which came into effect in August 2020.

Signatures of Asia Co Ltd general manager Chan Pich told The Post that since the FTA, the EU has increased their purchases of Vietnamese milled rice.

“However, EU buyers discovered that Vietnamese milled rice contained more agrochemicals [tricyclazole, acetamiprid and buprofezin] than EU food safety limits allow, leading to increased milled rice orders to Cambodia and Thailand,” he said.

At present, most of Cambodia’s milled rice is grown and processed in a traditional way, which Pich says ensures good quality and safety, as well as the sustainability of production.

However, exporters are concerned that the Kingdom’s milled-rice market and exports could be put in jeopardy, should the use of chemical fertilisers among Cambodian farmers maintain its ascent, he said.

He urged Cambodian farmers to cultivate rice according to the techniques and guidelines of the Ministry of Agriculture, Forestry and Fisheries.

“Use natural or organic fertilisers, or natural pesticides to expand Cambodia’s milled rice market, which will provide both quality and safety for consumers,” he said.

Amru Rice (Cambodia) Co Ltd CEO Song Saran told The Post on June 8 that although Cambodia’s use of agricultural pesticides was still lower than Vietnam’s, the Kingdom was still experiencing an influx of pesticides and chemical fertilisers from neighbouring countries, especially in bordering provinces.

Saran added that exporters are concerned that if the policy is not properly implemented in five to 10 years, Cambodia may suffer from the use of these toxic fertilisers and might be beyond help.

“For Cambodia to become a green agricultural country, it is necessary to have a policy on the use of pesticides and fertilisers, where the private sector must contribute towards the effective implementation of this policy, particularly by encouraging investment in organic fertiliser processing for domestic use,” he said.

He added that the promotion of organic fertilisers not only reduces the toxicity of agricultural land, but also saves money. “We want farmers to start changing their habits in the use of fertilisers and pesticides.”

Minister of Agriculture, Forestry and Fisheries Veng Sakhon told The Post that the government’s approach is to inspire farmers to incorporate Good Agricultural Practices (GAP) into day-to-day production so as not to create any undue risk to the export of agricultural products, especially rice to the EU.

“We are also encouraging farmers to use natural fertilisers to reduce costs and keep the soil fertile for a long time, while avoiding the use of pesticides that could damage soil quality,” he said.

Meanwhile, Ministry of Commerce spokesman Penn Sovicheat made it clear that milled rice, along with other Cambodian agricultural products, is thoroughly inspected before it can be exported, especially to China and Europe.

“In view of milled rice exports to Europe and China, we are always very cautious because these two are our big markets. So it is imperative that we do not allow this to happen, which could damage our reputation as a food-producing country.

“Our milled rice is the best in the world, having been ranked number one many times. We have never had a problem in the EU … even if their conditions are strict, we can still comply,” he said.

Between January and May this year, Cambodia exported 88,167 tonnes of milled rice to 23 European countries, the Cambodia Rice Federation said. This represented an increase of over 49 per cent year-on-year.

Last week, a Thai official said that Thailand and Vietnam were considering forming a cartel in order to raise rice prices and increase farmer income.

Yesterday, a Thai export body questioned a proposal by Thailand and Vietnam to form a rice export cartel that would pool their combined market share in order to support farmers and manage rising production costs.

The proposed export pact was announced by a Thai government spokesperson after agriculture officials from the two nations met on the sidelines of a farms expo in Bangkok.

Spokesperson Thanakorn Wangboonkongchana said in a statement that the price of the staple “has been low for more than 20 years while the cost of production has been increasing,” Reuters reported. The aim of the partnership was “to raise rice prices, increase farmer income, and increase bargaining power in the global market,” Thanakorn added.

Thailand and Vietnam are the world’s second and third biggest rice exporters after India, representing around 26 percent of global exports, and any coordinated move to form a price cartel could have significant flow-on effects on the global rice market, especially given the rising global prices for basic commodities prompted by the war in Ukraine. The announcement came amid a glut in the global rice market with rice prices in India falling to a five-year low due to the depreciating rupee and ample supplies in the world’s top rice exporting nations.

But Chookiat Ophaswongse, the honorary president of Thailand’s Rice Exporters Association, told Reuters that the idea was poorly conceived. Given that they lack  market predominance, if Thailand and Vietnam raised prices in a coordinated way, he said, price-sensitive buyers would simply flock to alternative suppliers, such as India, which is responsible for around 40 percent of global rice exports. “Politicians don’t understand the rice market and did not discuss this with the association,” Chookiat said.

In a similar vein, Nguyen Ngoc Nam of Vietnam’s food association also poured cold water on the plan, telling Reuters that the aim of the talks with Thailand was not price control but food security. “It’s not reasonable to talk about raising or controlling rice prices at this time when the global food price is on the rise,” Nam said.

These mixed messages suggest a degree of uncertainty as to how serious the Thai-Vietnamese plan is, and whether it will come to anything. But such a cartel, should it eventuate, would reflect the increasing tendency of governments to intervene in the workings of the market in order to achieve national objectives, such as to control prices or to maintain domestic political stability.

In Southeast Asia, the most recent example of this resurgent protectionism has been provided by the government of Indonesia, which imposed export restrictions on both coal and palm oil – in the latter case, amounting to a blanket ban – in order to control the domestic prices of electricity and cooking oil. Malaysia has also halted chicken exports, due to domestic shortages and rising prices, leading to likely shortages in import-dependent Singapore.ADVERTISEMENT

As global prices continue to rise against the backdrop of the turmoil in eastern Europe, we can no doubt expect to see further similar government interventions in the months to come.

The Mekong Delta province of Bac Lieu is expanding the use of organic fertilisers in rice cultivation to improve farmer’s incomes and protect the environment.

Bac Lieu (VNS/VNA) - The Mekong Delta province of Bac Lieu is expanding the use of organic fertilisers in rice cultivation to improve farmer’s incomes and protect the environment.

In the last winter-spring rice crop, Phuoc Long district’s Bureau of Agriculture and Rural Development launched a pilot programme for increasing the use of organic fertilisers and reducing the use of chemicals on a total area of 110ha, with 60 farmers involved.

Pham Van Cau, one of the farmers, said: “The prices of inputs, especially fertilisers, have shot up, and so the use of organic fertilisers helps farmers reduce costs while rice plants still have high yields and quality.”

He grew 2ha of Dai Thom 8, a speciality rice variety, and got nearly 10 tonnes per hectare, and earned more than 300 million VND (13,000 USD), he said.

Organic fertilisers cost less than chemical fertilisers, and farmers in fact can make them themselves from animal waste, leaves and other agricultural by-products.

Thai Thi Loan, deputy head of the bureau, said organic fertilisers improve soil quality and help rice plants grow well and prevent diseases.

The pilot programme helped reduce the use of chemical fertiliser by 50-70 percent, she said.

The bureau plans to expand the organic rice cultivation, she added.

In the last winter-spring rice, the province Agriculture Extension Centre implemented organic rice farming models on a total of 300ha in Phuoc Long, Hoa Binh and Vinh Loi districts.

Farmers who took part in them were given free seeds and biological pesticides, and taught advanced farming techniques.

Huynh Quoc Khoi, director of the centre, said the models reduced costs by 10-20 percent while yields were still high and farmers got higher prices for their clean rice.

Bac Lieu has great advantages in adopting to organic standards since it has more than 40,000ha of lands where rice is grown in the rainy season and shrimp is bred at other times.

This model is naturally clean with farmers required to use few chemicals.

Local authorities encourage farmers to join co-operatives and tie up with companies to implement the model to ensure they can sell their produce and also grow high-quality rice for export.  

Ba Dinh Cooperative in Hong Dan district was one of the first co-operatives to grow rice to organic standards, and its members now have 300ha under shrimp-rice.

In the last winter-spring rice crop, they planted ST24 and ST25 rice varieties, which have won awards as the world’s best.

Nong Van Thach, director of the co-operative, said: “All the rice was planted to organic standards.”

The co-operative guarantees outlets for all members’ produce, buying the rice at 15-20 percent above market prices and selling it to HCM City, he said.

Bac Lieu has established the Fragrant Rice - Clean Shrimp Co-operative Alliance with the participation of 21 co-operatives which have more than 4,000ha under shrimp-rice.

The co-operatives have created favourable conditions for establishing value chains for their products.

Vietnam’s rice sector is the key to meeting methane reduction targets

14 May 2022

Authors: Katherine M Nelson, Reiner Wassmann and Björn Ole Sander, International Rice Research Institute

At the COP 26 Glasgow, Vietnamese Prime Minister Pham Minh Chinh joined more than 100 countries in signing a methane emission reduction pledge. Rice production contributes almost half of Vietnam’s total methane emissions and is the centre of action for reducing the powerful greenhouse gas. Reaching the goal of reducing methane emissions from rice by 30 per cent will require transforming millions of smallholder practices to low-emissions cultivation.

Methane is a short-lived pollutant with a lifetime of around 12 years, compared to carbon dioxide’s several hundred years. But methane’s global warming potential is 28 times that of carbon dioxide, which means reducing methane emissions can curb global warming with comparably quick effect.

Rice production is a major contributor to global anthropogenic methane emissions and Vietnam is one of the few top rice-producing countries to sign the global methane pledge. The signatories agree to take voluntary actions to collectively reduce global methane emissions by 30 per cent by 2030. The feasibility of this pledge depends on the realistic levels of methane reduction at the national level.

According to Vietnam’s Third National Communication, national methane emissions were 99.5  metric tons of carbon dioxide equivalent (MtCO2e) in 2019. Irrigated rice accounts for 43 per cent of this at 42.7MtCO2e. Assuming a uniform reduction in methane emissions across all sectors, the 30 per cent target translates to an annual reduction target of 12.8MtCO2e for irrigated rice production alone.

In the updated 2020 Nationally Determined Contribution, Vietnam committed to reducing overall emissions by 9 per cent unconditionally and by 27 per cent conditional on international funding. A 9 per cent reduction in the rice sector would equate to 3.8MtCO2e. The national strategy for achieving emission reduction in rice outlines pragmatic and economical methods of controlled water management, reduction of straw burning and conversion of inefficient rice land for other uses. Various crop management systems, including the Sustainable Rice Platform standard and the System of Rice Intensification, could disseminate mitigation practices such as alternate wetting and drying, and mid-season drainage.

Achieving the 30 per cent methane reduction target would require another 9MtCO2e of methane reduction in the rice sector. An approximate 5.5MtCO2e reduction would be feasible, but will require greater targets and investments — reliant on international finance for low-emissions rice farming practices — than are currently outlined in national plans.

Investments are needed to improve existing canals and pumping facilities to enable controlled water management. These efforts must be backed up by enhanced training and an awareness campaign to encourage better water management behaviour. The total mitigation from this transition is estimated at 9.5MtCO2e or a reduction of approximately 22 per cent. This target is ambitious but feasible — the additional 8 per cent has to be regarded as aspirational at this point. The remaining 8 per cent will require a paradigm shift in agriculture policy prioritising emission reduction as an overarching goal in rice production.

The government could also consider improvements in the management and use of rice straw by incentivising its adoption for off-field purposes in circular economy approaches. This option could reduce methane emissions further but the current lack of detailed data impedes estimation of its mitigation potential. A possible trade-off with soil health should also be considered when planning for large-scale straw removal. Investments in research and scaling which have not yet left the scientific sphere — innovative fertiliser management, soil additives or ultra-short duration and low-emission varieties — could also contribute further to reaching the reduction goal.

While the numbers are pointing towards the target, the challenge is introducing a set of mitigation options to millions of farmers across Vietnam. Low-emission practices have previously been successfully implemented. Through its provincial extension program, An Giang — a major rice producing province in the Mekong River Delta — successfully promoted good management practices, known as ‘one must do, and five reductions’. Low-emissions programs have contributed to a reduction of over 2 MtCO2e per year, in farming systems with good irrigation and track record of advanced production practices. These conditions cannot be assumed as the standard throughout the country.

Vietnam’s participation in the methane reduction pledge represents an opportunity to tap into international climate financing. These funds could channel resources into green agricultural development projects in rural regions and secure funds for low-income farming populations heavily threatened by climate change. Additionally, participants commit to the highest tier of IPCC inventory methodologies and to improve the transparency, accuracy and comparability of national greenhouse gas inventory reporting. This will require coordination among various government, private and international institutions and could create trickle-down effects that will benefit global greenhouse gas reduction efforts as well as Vietnam’s rice exports to environmentally conscious consumers.

Katherine M Nelson is a climate change specialist at the International Rice Research Institute, Hanoi, Vietnam.

Reiner Wassmann was climate change coordinator at the International Rice Research Institute, Hanoi, Vietnam until his retirement in 2020.

Vietnam's rice exports to the European Union continued to grow in the first quarter of 2022, thanks to the EU -Vietnam Free Trade Agreement (EVFTA), according to the Ministry of Industry and Trade (MoIT).

Hanoi (VNS/VNA) - Vietnam's rice exports to the European Union continued to grow in the first quarter of 2022, thanks to the EU - Vietnam Free Trade Agreement (EVFTA), according to the Ministry of Industry and Trade (MoIT).

In the first quarter, Vietnam's rice exports reached 1.48 million tonnes, earning 715 million USD, up 24 percent in volume and 10.5 percent in value on year.

The rice exports to the EU in the first two months of this year recorded an impressive volume of 15,500 tonnes, earning nearly 12 million USD. The exports rose almost four times in volume and 4.3 times in value compared to 2021.

In the bloc, Italy suddenly took the lead in the import volume of Vietnamese rice with an increase of 26 times over the same period. In addition, there were several other key markets such as Germany, France and the Netherlands.

The export price of Vietnam's rice to the EU recorded an increase of 9 percent to 755 USD per tonne, while Vietnam's average rice export price fell 12.1 percent in the first two months of the year to 469 USD per tonne.

Vietnam's rice export price to the EU was higher than the average price because the rice exported to this market was mainly aromatic rice with high value. However, Vietnamese export rice has still been unable to compete in price in the EU market against other competitors such as Cambodia, Thailand and India.

According to MoIT, in 2021, despite being affected by the COVID-19 pandemic, Vietnam's rice exports to the EU reached 60,000 tonnes, worth 41 million USD. The exports surged by about 1 percent in volume and more than 20 percent in value year on year. For the first time, some speciality rice varieties of Vietnam, such as ST24 and ST25 fragrant rice, were exported to the market. 

According to the commitments from the EVFTA, the EU gives Vietnam an export quota of 80,000 tonnes of rice per year to the EU, including 30,000 tonnes of milled rice, 20,000 tonnes of unmilled rice and 30,000 tonnes of aromatic rice. Especially, the EU will not apply a quota for broken rice exported from Vietnam.

The ministry said Vietnam could export 100,000 tonnes of all kinds of rice to the EU every year. 

Besides, the EU will cut the tariff for rice to zero within 3-5 years from the date of entry into force of the EVFTA. This opens up opportunities for Vietnamese rice to compete with other countries' rice products exported to the EU.

The MoIT representative said that now, businesses have efficiently taken advantage of several incentives from the EVFTA to increase the rice exports to the EU.

According to the Vietnam Food Association (VFA), in 2022, Vietnam's rice exports to the EU are expected to increase further, especially as the quality of Vietnamese rice has been improved. However, enterprises exporting Vietnamese rice need to better take advantage of EVFTA. 

At present, Vietnam's rice accounts for only 3.1 percent of the total amount of rice imported to the EU. This market imports 3-4 million per annum, according to data from the European Statistics Agency (Eurostat). 

In 2021, the EU imported 3.6 million tonnes of rice, 1.6 million tonnes were traded within the bloc, and two million tonnes were imported from other countries.

Meanwhile, Vietnam has not yet met the full rice export quota provided by the EU for 2021, thus still has plenty of room to increase rice exports to this market.

One of the reasons why Vietnam did not use all rice quotas is that less than 20 percent of domestic businesses know clearly about the EVFTA, according to Nguyen Thi Thu Trang, Director of the WTO and Integration Centre under the VCCI.

According to Trang, besides the advantages of the EVFTA, enterprises must also improve the quality of Vietnamese rice and change their measures in approaching the market to expand market share.

With high and stable demand for speciality rice from Asia, the EU will be a potential export market for Vietnamese rice in the future.

From India to Vietnam, cutbacks in nutrients could lead to food crisis 

Freshly harvested rice in the Philippines, on April 10. MUST CREDIT: Bloomberg photo by Veejay Villafranca.

Soaring fertilizer costs have rice farmers across Asia scaling back their use, a move that threatens harvests of a staple that feeds half of humanity and could lead to a full-blown food crisis if prices aren't curbed.

From India to Vietnam and the Philippines, prices of crop nutrients crucial to boosting food production have doubled or tripled in the past year alone. Lower fertilizer use may mean a smaller crop. The International Rice Research Institute predicts that yields could drop 10% in the next season, translating to a loss of 36 million tons of rice, or the equivalent of feeding 500 million people.

That's a "very conservative estimate," said Humnath Bhandari, a senior agricultural economist at the institute, adding that the impact could be far more severe should the war in Ukraine continue.

Fertilizer prices have been rising globally due to supply snags and production woes. More recently. the war has disrupted trade with Russia, a big supplier of every major type of crop nutrient. The surge in fertilizer costs is threatening to stoke food inflation if farmers continue to cut back and crop yields suffer. If that happens, global supply chains are likely to take a major hit: Practically every plate of food makes it to the dinner table with the help of fertilizers.

Rice farmers are particularly vulnerable. Unlike wheat and corn, which have seen prices skyrocket as the war jeopardizes one of the world's major breadbaskets, rice prices have been subdued due to ample production and existing stockpiles. That means rice growers are having to deal with inflated costs while also not getting more money for their grains.

Nguyen Binh Phong, the owner of a fertilizer and pesticide store in Vietnam's Kien Giang province, said the cost of a 110 pound sack of urea -- a form of nitrogen fertilizer -- has jumped three-fold over the past year. He said some farmers have slashed fertilizer use by 10% to 20% because of soaring prices, leading to a lower output.

"When the farmers cut fertilizer use, they accept that they will get lower profit," he said.

Governments in Asia, where much of the world's rice is harvested, are keen to avoid this scenario. Keeping prices under control is important for politicians, given rice's importance as a staple for hundreds of millions of people, especially lower income groups. Many nations provide fertilizer subsidies to increase yields of improved varieties of cereal crops.

The fertilizer rally is increasing their fiscal burden. India, which relies heavily on fertilizer imports, is set to spend about $20 billion to shield farmers from higher prices, up from about $14 billion budgeted in February. The South Asian nation is the world's second-biggest producer of rice and exports to countries like Saudi Arabia, Iran, Nepal and Bangladesh.

Somashekhar Rao, 57, a farmer who grows rice on a 25-acre plot in Telangana, in southern India, said he's struggling with the increased cost of fertilizer. He expects yields to fall by 5-10% for his winter-sown crop because of the delay in securing enough supplies. Fertilizer is most effective when used on plants at their peak growing cycle.

The crunch is not all bad. Overuse of chemical fertilizers is rife in the region. The surge in prices is encouraging farmers to use resources more efficiently, according to the International Rice Research Institute, which is working with growers to achieve optimal results. Solutions include utilizing a combination of chemical and organic inputs to maintain yields while improving soil health.

Still, these steps will take time to implement. And as the war in Ukraine continues to disrupt economies across the world, farmers and the rice institute say the hardest days are perhaps yet to come.

"If this continues, then it's inevitable" that prices will go up, Bhandari said. "It has to be reflected somewhere."

Buyers in Vietnam, China and Indonesia switch to the foodgrain, but its rates rising sharply 

March 3 (Reuters) - Prices of rice exported from Vietnam rose this week, as trade routes to China reopened with some traders betting on additional demand from buyers looking for alternate sources due to the Ukraine crisis.

Vietnam's 5% broken rice were offered at $400 per tonne on Thursday, versus $395-$400 a week ago.

"Shipments to China are expected to increase as China is reopening borders with Vietnam after coronavirus curbs," a trader in Ho Chi Minh City said.

"The ongoing Ukrainian war might prompt buyers to import more rice from Asia, including Vietnam," the trader added.

A Bangkok-based trader said the situation in Ukraine "might have increased freight rates slightly."

Prices of Thailand's 5% broken rice widened slightly to $403-$400 per tonne from $400 last week, also taking cues from currency fluctuations with the baht valued at 32.60 against the U.S. dollar on Thursday.

But another trader said the crisis has not impacted Thai rice exports because neither Russia nor Ukraine were among its main trading partners.

Ukraine's military recently suspended commercial shipping at its ports, threatening grain and oilseed exports.

Demand for rice from top exporter India improved, but prices of its 5% broken parboiled variety were unchanged at $370-$376 per tonne as the rupee weakened, translating into higher margins for traders from overseas sales.

"Demand for broken rice has improved as prices of corn are rising. Some buyers are looking for alternatives to corn," said an exporter based at Kakinada, Andhra Pradesh.

Indian farmers may harvest a record 127.93 million tonnes versus 124.37 million tonnes the year before.

Meanwhile, domestic rice prices stayed high in Bangladesh, despite good reserves, officials said.

Freight rates have increased slightly due to the Ukraine crisis, prompting higher import costs for grains, a trader said.

Loc Troi Group, a leading provider of agricultural services and products in Vietnam, shipped more than 4,500 tonnes of rice worth over 3 million USD to markets in Europe, Americas and Asia in early 2022.