Vietnam said on Friday that it plans to stockpile rice and suspend new rice export contracts through the end of the month to ensure it can feed its 97 million population through the coronavirus crisis. The country is the world’s third-largest exporter of rice, behind India and Thailand. In an update on its website, the Finance Ministry said Vietnam’s state reserves department planned to have 190,000 metric tonnes of rice in storage by June 15. The move comes amid worldwide food security concerns as the virus threat spreads, with some governments contemplating restricting the flow of staple food out of their countries. In Russia, the vegetable oils union has called for a restriction on sunflower seed exports, and Kazakhstan has suspended exports of goods such as buckwheat, sugar, and sunflower oil until the middle of next month. Reuters reported that Vietnam’s export ban would have a significant short-term effect on global rice supply. “If Vietnam maintains the export ban, we will suddenly have about 10-15 per cent less available supply in the world market in the near term,” one European rice trader was quoted as saying. “Africa especially could face disruption from this.” Concerns have been compounded by India, the top global rice exporter, entering a three-week lockdown that brought several logistics channels to a halt, disrupting food supply chains. CONCERNS FOR WORKING CLASS Phung Duc Tung, a specialist in agriculture economics and director of Vietnam’s Mekong Development Research Institute, said Vietnam’s decision to halt rice exports could end up hurting a large segment of Vietnam’s working population that is dependent on the rice trade. “To suspend exporting rice is not quite right,” Tung said. “The government should let the market freely operate so that labour workers have the motivation to work, especially since rice farmers are a vulnerable group.” He said that although Vietnam’s bid to secure food safety amid a global pandemic is understandable, the government is only allowed to intervene in the market when a national emergency has been declared, according to the country’s competition law. But Vietnam has not yet declared a national emergency and has reported 164 cases of the disease as of Friday, with no deaths. Coronavirus: enough food for India, but supply chains are choked Tung said Vietnam should instead devise policies to ensure rice prices are stabilised for all consumers, especially the working class. “Those who eat the most rice in Vietnam are low-income earners, manual labour workers,” he said, adding that he feared that if the price of rice increased, low-income workers who had lost jobs since the outbreak emerged would be hardest hit. If the export ban were to occur, rice smuggling across the border through unofficial channels could become an issue too, Tung said. “It is not certain that rice would stay within the country, and the government would have to spend money on preventing rice from being smuggled out of the country,” he said. TRADE MINISTRY STEPS IN A final decision on stopping rice exports has not yet been made, as the Ministry of Industry and Trade has already appealed to the government to reconsider the export suspension, even though the ministry had previously proposed the same policy. Deputy Industry and Trade Minister Tran Quoc Khanh told state media on Wednesday that the rice stock inventory was smaller than the ministry previously thought, and so the ministry changed its mind on its policy recommendation after it was informed of the actual stockpile numbers. Shirley Mustafa, a global rice market analyst at the Food and Agriculture Organisation (FAO) of the United Nations, said it was difficult to determine which countries would be most affected if Vietnam were to suspend its rice exports, given the uncertainties surrounding the pandemic. However, she added, it was clear that imposing the ban would not benefit Vietnam either domestically or internationally. “In the international market, an export ban would damage Vietnam’s credibility as a reliable supplier of rice, an effect that could outlast the outbreak, undermining Vietnam’s ability to secure international sales well into the year, if not longer,” Mustafa said, adding that the ban would also deprive rice farmers of outlets for their produce and depress prices and producers’ incomes. She said she did not foresee other countries following Vietnam’s lead, including India, where stockpiles of rice are at record highs and are seen as more than sufficient to meet emergency needs and the requirements of the country’s public distribution system. Strong import demand for rice may not occur this year, Mustafa noted, as recent developments in currency and petroleum markets could limit countries’ ability to purchase rice on international markets. THAI MARKET CAUTIOUS The Thailand market, meanwhile, remains cautious over supply issues, triggered by one of the worst droughts in decades that is hurting many rice-growing areas, while traders said the outbreak has also slightly raised domestic demand of some types of rice, keeping prices higher. The Thai government has declared a state of emergency across the country over the coronavirus, but is yet to issue any restrictions that would directly impact agricultural production or exports. “There won’t be any shortage of rice through the crisis, but prices are likely to remain high due to concerns over supply,” a Bangkok-based trader told Reuters, adding that prices could go even higher if there is more overseas demand, especially if Vietnam’s decision to stop exports goes through. The head of the Association of Thai Rice Exporters, Charoen Laothammathat, said Thailand currently exports 500,000 tonnes of rice per month, but that the drought has reduced production from 20 million tonnes to 18.5 million tonnes, with about half of that for domestic consumption. Hong Kong protests, cheap Chinese rivals: why Thai rice is in crisis Thailand’s rice exports last year totalled 7.5 million tonnes, the lowest level in six years, according to the rice exporters association. “Current exports to Hong Kong are about 150,000 to 180,000 tonnes a year, and rice stockpiling in Hong Kong earlier, when the city saw a bout of panic buying, didn’t increase Thai export volumes,” said Laothammathat, referring to how Hong Kong shoppers swept supermarkets clean of essentials last month as virus cases rose. Data from the US Department of Agriculture shows that combined global production of rice and wheat is expected be 1.26 billion tonnes this year, which would surpass the total combined consumption of those crops. But these projections assume normal crop flows, and prices for rice are already rising due to expectations of a further squeeze on exports. LOGISTICS ISSUE “It is a logistics issue,” said a senior Singapore-based trader at one of world’s top rice traders. “Vietnam has stopped exports, India is in a lockdown and Thailand could declare similar measures.” Benchmark rice prices in Thailand are currently from US$468 per tonne to US$495 per tonne. That price topped $1,000 a tonne during the global economic crisis of 2008, when export restrictions and panic buying buoyed prices. “We are unlikely to see a repeat of 2008,” the Singapore rice trader said. “One thing is that the world has enough supplies, especially in India, where inventories are very large.” Global rice stocks are expected to surpass 180 million tonnes for the first time this year, up 28 per cent since 2015-16. But those inventories are not distributed evenly, with more than 153 million tonnes in China and India alone. That means big rice buyers such as the Philippines , the top rice importer, and other countries in Asia and Africa could be vulnerable if crop movements are curtailed for long. Malaysia has enough rice to last two and a half months, the Ministry of Agriculture and Food Industry told Reuters on Friday, “Our rice inventory is good for 65 days. We have enough rice for the next two months,” said Philippines Agriculture Secretary William Dar, adding that with additional supply coming from the dry season harvest, there would be enough rice for the country for the next four months. Additional reporting by Jitsiree Thongnoi and Bloomberg