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HANOI - Vietnam will consider cutting the area under rice cultivation if prices of the grain fall further, the country's agriculture minister said, as farmers struggle to offload their new harvest due to weak demand and strict coronavirus movement curbs.

"We have to consider plans to reduce the rice growing area to make way for other crops that are more profitable," Le Minh Hoan said in a statement posted on the government's website late on Tuesday.

Prices for Vietnam's 5% broken rice have fallen to around $390 per tonne, the lowest since February 2020, due to weak demand. Vietnam is the world's third-largest exporter of the commodity after India and Thailand.

Hoan did not say by how much Vietnam planned to cut the rice production area, but state media reports cited the ministry as saying earlier this year that it could cut the rice growing area by 5.4% to 3.5 million hectares (8.6 million acres) by 2030.

"We cannot place farmers at risk to fulfil our rice export target," Hoan said.

Farmers are finding it hard to sell their newly harvested crop because traders are unable to make purchases due to COVID-19 movement curbs as Vietnam battles its worst outbreak to date.

Traders' purchases of rice from the ongoing summer-autumn harvest in the Mekong Delta province of An Giang have halved from the same time last year, the government said in the statement.

Traders said export activity was slow due to weak demand and fierce competition from Thailand and India.

Rice exports from Vietnam in the first seven months of this year fell 12.7% from a year earlier to 3.5 million tonnes, according to government customs data. REUTERS



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