Vietnam is exporting the most rice in the world.

Vietnam is currently the country exporting the most rice and at the highest price in the world . In August alone, Vietnam exported nearly 1 million tons, bringing in revenue of more than half a billion USD.

Since July 20, India has banned the export of white rice and by the end of August, the country has tightened all rice export activities. The two main exporting countries are Vietnam with a target of more than 7 million tons and Thailand with over 8 million tons, up to this point, Vietnamese rice is surpassing.

Surpassing Thailand in both quantity and price

As of early September, the Thai Rice Exporters Association (TREA) said it had just adjusted the export prices of rice by 10 - 35 USD/ton compared to mid-August. Specifically, the price of 5% broken rice is 646 USD/ton and 25% broken rice is 607 USD/ton due to the continued tension in the world market, especially from India and Myanmar. The Thai Ministry of Commerce informed that from the beginning of the year to the end of August, 5.29 million tons of rice were exported, an increase of 11.9% over the same period in 2022. Thailand's largest rice consuming markets are Indonesia, Iraq, South Africa, the US and China. One of Vietnam's major rice buyers in Southeast Asia, the Philippines, is interested in a rice import agreement with Thailand. This agreement will have "more clarity" by the end of September.

Vietnam is taking advantage of the opportunity of rising world rice prices.

Cong Han

Meanwhile, according to the announcement of the Vietnam Food Association (VFA), the export price of 5% broken rice from Vietnam is currently at 648 USD/ton and 25% broken rice is 628 USD/ton. In terms of volume, according to data from the Ministry of Agriculture and Rural Development, in August, rice exports were estimated at 950,000 tons, worth 553 million USD. It can be said that Vietnamese enterprises have taken advantage of the opportunity to boost rice exports because compared to the previous month, the figure was only 661,000 tons of rice worth 363 million USD. Compared to the same period last year, the export volume and value also increased sharply. Specifically, in August 2022, Vietnam exported 718,000 tons of rice, worth 339 million USD.

In the first 8 months of the year, Vietnam exported 5.85 million tons of rice, worth nearly 3.2 billion USD, up 22% in volume and 36.1% in value over the same period in 2022. The average export price of rice in the first 8 months of 2023 is estimated at 542 USD/ton, up 11.5% over the same period in 2022. By the end of July 2023, the Philippines was Vietnam's largest rice consuming market with a market share of 37.6%, reaching 1.94 million tons and 985 million USD. In the group of 15 largest rice exporting markets, the market with the strongest increase in value was Indonesia, 16.3 times higher.

Based on officially published data, it can be seen that Vietnam currently exports about 560,000 tons more rice than Thailand; the price of 5% broken rice from Vietnam, especially 25% broken rice, is also higher than that of the same quality rice from Thailand.

False rumors appear to manipulate prices

Last week, the world rice market had some notable developments. Regarding supply, India tightened all rice export activities such as: imposing a 20% export tax on parboiled rice (accounting for 1/3 of rice exports) and applying a floor export price of 1,200 USD/ton on Basmati rice (export volume of about 4 million tons/year). Immediately after that, this country "opened" the market door by allowing white rice shipments that are often stuck at ports to continue exporting. In addition, it opened export quotas for 3 countries: Bhutan, Singapore and Mauritius with a total output of less than 150,000 tons of rice. Although the output is not much, this move shows that India can still open up opportunities for government- level export contracts. This can partly cool down the extremely hot price fever.

Another supplier, the world’s sixth largest, Myanmar, is still keeping the issue of suspending rice exports open. Importers and exporters are still anxiously watching the next developments.

On the other hand, the two largest rice buyers in the world as well as Vietnam, the Philippines and Indonesia, have simultaneously implemented policies related to rice supply and price. Specifically, Indonesia decided to spend over 525 million USD to distribute free rice to 21.35 million poor families, a measure to support people in coping with high rice prices. Meanwhile, the Philippines implemented a price ceiling policy for regular milled rice at 41 pesos/kg (equivalent to about 0.72 USD), the price of well-milled rice was set at 45 pesos/kg (0.79 USD). Both of these policies took effect from the beginning of September.

Regarding the Philippines' price ceiling policy, some Vietnamese traders recently said that Philippine businesses have simultaneously requested to cancel contracts because the more they work, the more they lose. The Philippine importers canceling contracts will affect export activities and cause the export price of Vietnamese rice to decrease.

In response to the news that the Philippine partner requested to cancel the contract, many businesses in Thanh Nien confirmed that this information is baseless. In fact, the price of rice has increased recently, so exporters and importers have agreed to extend and extend the contract implementation period to minimize possible negative impacts. Two weeks ago, the Philippines said that the national rice reserve has decreased from 60 days to 45 days and that it needs to quickly add at least 500,000 tons of rice to ensure food security. The Philippines is racing with other countries to import rice to ensure supply in the El Nino weather conditions that continue until the end of the first quarter of 2024. "There may be cases where some private businesses in the Philippines temporarily suspend rice imports due to the price ceiling regulation, but it does not affect the country's rice import demand. This is very important to clarify to avoid disrupting the market and making illegal profits," said a rice exporter in Ho Chi Minh City.

According to some rice industry experts, India's rice export ban and recent export restrictions have caused a shortage of 8-10 million tons in the global market. Without India's bans, prices would have increased. This year, to cope with El Nino, Indonesia had to import up to 2 million tons of rice. That's not to mention the increased demand from a series of other countries, including China, a country of 1.4 billion people. Even the world's second largest rice exporter, Thailand, the Rice Packers Association has adjusted the price of packaged rice up by 3 baht/kg from early September 2023. If a few Philippine businesses stop buying, it will not affect the world market.

Currently, Vietnam has exported 5.85 million tons, compared to the target of 7 million tons, the total amount of rice that can be exported in the last 4 months of the year is only over 1.15 million tons. This is a very modest number compared to current world demand. From now until the end of the year, the export price of 5% broken rice certainly cannot fall below 600 USD/ton; the price will likely remain at 620 - 630 USD/ton, even if India opens a few more government-level contracts.

Thanhnien.vn