Laos Could Become a Rice Exporter in 10 Years

Laos will become a rice exporter over the next decade if it can maintain current grain production and consumption growth rates, according to an Asian Development Bank (ADB) funded study.

The Asean and Global Rice Situation and Outlook, which was released on the ADB’s website recently, shows that Laos will be able to shift its status from rice importer to a minor rice exporter over the next 10 years, if it can maintain the growth rate of rice production above the growth rate of consumption.

At present, Laos has 821,000 hectares of paddy fields with an average production capacity of 1.76 tonnes per hectare. In 2011, the country produced 1.44 million tonnes of milled rice – an increase of 3.61 percent compared to the previous year.

The increasing rice production growth rate is mainly due to an average annual yield gain of 2.88 percent, with the harvested area increasing only by 0.71 percent. In 2011, total rice consumption stood at 1.46 million tonnes – an increase of 1.67 percent on the previous year. This is mainly due to population growth, as per capita rice consumption grows only 0.10 percent annually over the baseline.

At present, Laos has a total population of 6.48 million, which is projected to grow at 1.56 percent per year to reach 7.55 million by 2021.

The study highlights that if Laos can maintain the rice production growth rate at 3.61 percent and consumption growth rate at 1.67 percent over the next 10 years, the country will have surplus rice for export and become a minor exporter in the region.

The demand for rice in the Asean and world markets has been increasing over the past five years due to population growth, creating the possibility for Laos to export rice within the region. Thailand has already convinced Vietnam, Laos, Cambodia and Myanmar to establish a rice exporting federation, aiming to protect the interests of these rice growing nations.

In keeping with Thai government policy, the federation would agree on the price of rice, planning to sell it to regional and world markets for a price that could increase by about 10 percent annually, which would be extremely beneficial for rice exporting countries. At present, Thailand and Vietnam are the major rice exporters both in the region and the world.

It is the Lao government’s policy to boost investment in agribusiness to make the most of the country’s fertile land. One of the potential rice production areas is Savannakhet, and the government has set up a pilot project to grow organic rice in the province for export. A number of countries, including Kuwait, have expressed interest in investing in rice cultivation in Laos.