In September 2023, which market will Vietnam sell the most rice to?

In September, Indonesia was a key market to consider.

According to preliminary statistics from the General Department of Customs, in September 2023, Vietnam exported more than 605,400 tons of rice, earning 377.9 million USD, a slight increase of 3.8% in volume but a sharp increase of 37.3% in value compared to the same month last year.

In September 2023, which market did Vietnam sell the most rice to?

In September 2023, Vietnam exported 166,000 tons of rice to Indonesia, worth $101.4 million, 53 times more than in September 2022. Meanwhile, the export value to the Philippines and China was $62.7 million and $43.7 million respectively. Thus, Indonesia officially surpassed the Philippines and China to become Vietnam's largest rice customer in September.

Notably, the Vietnam Trade Office in Indonesia ( Ministry of Industry and Trade ) recently announced that Mr. Arief Prasetyo Adi, Acting Minister of Agriculture of Indonesia, confirmed to the press that Indonesia has chosen Vietnam and Thailand as the two main suppliers for the upcoming purchase of 1.5 million tons of rice.

On October 10th, Mr. Mokhamad Suyamto, Director of Supply Chain and Public Services at the Indonesian Logistics Agency (Peum Bulog), also confirmed that Preum Bulog will import 1.5 million tons of rice from Vietnam and Thailand.

All necessary permits for importing 1.5 million tons of rice have been issued by the relevant Indonesian authorities, and the imports will begin in late October.

Previously, the Vietnam Trade Office in Indonesia (Ministry of Industry and Trade) announced that on October 8th, Indonesian President Joko Widodo declared that the rice harvest in the last six months of 2023 would not be sufficient to meet domestic demand. Therefore, the Indonesian government needs an additional 1.5 million tons of rice reserves by the end of 2023.

Indonesia has to increase rice imports because its agricultural production has been severely affected by the El Nino phenomenon, and the government needs more rice to stabilize market rice prices.

According to the Indonesian Food Agency (Bulog), as of September 22, the agency's rice reserves totaled over 1.7 million tons, including 1.65 million tons of national rice and nearly 64,000 tons of commercial rice.

Rice prices in Indonesia have risen sharply recently. On October 8th alone, the retail price of medium-grade rice was 13,200 Rp/kg (1 USD = 15,400 Rp); and 14,920 Rp/kg for high-quality rice.

Meanwhile, the highest retail price for rice, as regulated by the Indonesian government, is 10,900-11,800 Rp/kg for medium-grade rice and 13,900-14,800 Rp/kg for high-quality rice.

Indonesian rice prices in September rose 18.4% year-on-year, the highest level since 2014. Specifically, September rice prices increased 5.6% compared to August, reaching their highest level since February 2018.

To make the most of this opportunity, the Vietnam Trade Office in Indonesia advises rice exporting businesses to follow the guidelines of the Ministry of Industry and Trade on exporting rice to the Indonesian market.

Specifically, rice exporters need to closely monitor market conditions and assess opportunities and risks to develop appropriate trading strategies. Signing suitable contracts ensures export efficiency and benefits for farmers.

In addition, businesses also need to consider risk mitigation strategies related to pricing, payment, and delivery in the context of the current global trade situation being subject to various impacts.

Market opportunities remain very bright from now until the end of the year.

According to data from the General Department of Customs, as of the end of September 2023, Vietnam exported nearly 6.42 million tons of rice, worth 3.54 billion USD. Compared to the same period last year, rice exports increased by 19.5% in volume and 35.9% in value.

In terms of export markets, the Philippines remains the largest customer of Vietnamese rice. In the first nine months of 2023, rice exports to this market reached 1.29 billion USD, up 13% over the same period in 2022. China is Vietnam's second largest rice export market with a turnover of 495.8 million USD, up sharply by 55.2%.

Indonesia ranked third, with rice exports to this market reaching US$462.6 million, a 1,796% increase compared to the same period last year. Additionally, Vietnam's rice exports to Türkiye and Chile saw significant increases, at 10,608% and 2,291% respectively.

According to the Ministry of Agriculture and Rural Development, the average export price of Vietnamese rice in the first nine months of 2023 reached US$553 per ton, an increase of 14% compared to the same period in 2022, and at times even reached nearly US$650 per ton.

Industry businesses believe the export rice market remains very promising in the final months of the year. Accordingly, besides the Indonesian market, the Philippines – the largest importer of Vietnamese rice – has resumed purchases after nearly a month of suspension due to price caps on domestic rice. Meanwhile, the Chinese market is expected to increase purchases of glutinous rice to meet demand for the upcoming Lunar New Year holiday.

With export prices around 580-600 USD/ton, Mr. Nguyen Van Don - Director of Viet Hung Co., Ltd. (Tien Giang) - predicts that rice exports in 2023 will bring in approximately 5 billion USD. This figure is significantly higher than in previous years.

According to the Ministry of Agriculture and Rural Development, due to the increased area of autumn-winter rice cultivation, Vietnam may export approximately 7.8 million tons of rice this year. Therefore, with the remaining three months of 2023, Vietnam still has about 1.38 million tons of various types of rice available for export.

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