| The rice problem and the decisive moment for global food security Responding to unpredictable developments in the rice market |
To ensure national food security, the Ministry of Industry and Trade has just issued information on response plans to unpredictable developments in the global rice market. It emphasizes the need to ensure rice reserves and be careful in negotiating export rice prices to achieve the highest value.
In the context of the complicated and unpredictable global food trade situation due to the impact of many factors such as the ban on rice exports in some countries (India, UAE, Russia), the negative weather phenomenon of El Nino affecting food and grain production in many regions. In particular, the complicated geopolitical developments (Russia announced its withdrawal from the Black Sea grain agreement) ... have strongly impacted the global rice supply, raising concerns about world food security issues as well as affecting the economic recovery trend of many countries when the inflation situation has not improved.
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| India imposes export tax of up to 20% on some of its main rice varieties from September 2022. |
According to the Ministry of Agriculture and Rural Development, in 2023, the whole country will cultivate 7.1 million hectares, with an average yield of 6.07 tons/ha and an output of over 43.1 million tons, an increase of 452,000 tons compared to 2022. With the above expected rice output, in addition to ensuring domestic food security, processing, breeding, and livestock farming, Vietnam can export over 7.5 million tons of rice in 2023. According to statistics, in the first 7 months of 2023 alone, 4.83 million tons were exported, with about 2.67 million tons remaining for export in the remaining 5 months of 2023.
In the context of unpredictable developments in the global rice trade market, and at the same time, implementing the Prime Minister's direction in Official Dispatch No. 610/CD-TTg dated July 3, 2023 on strengthening the implementation of tasks and solutions to promote rice production and export and Directive No. 24/CT-TTg dated August 5, 2023 of the Prime Minister on ensuring national food security and promoting sustainable rice production and export in the current period, the Ministry of Industry and Trade has implemented stabilization of domestic rice prices, ensuring food security, the Import-Export Department - Ministry of Industry and Trade has issued Documents No. 584/XNK-NS to rice export traders and Document No. 585/XNK-NS to the Vietnam Food Association requesting coordination in implementing a number of related contents.
Accordingly, the document requests the Vietnam Food Association and traders to strictly implement the provisions of Decree 107/2018/ND-CP, including regularly maintaining the minimum circulating reserve level, ensuring the balance between export and domestic consumption, contributing to stabilizing the price of paddy and rice in the domestic market, and reporting on the situation of paddy and rice in stock, the situation of signing contracts and implementing export contracts according to current regulations. Proactively follow the global trade market situation to organize appropriate production and negotiation plans, ensuring export efficiency.
On July 31, the Ministry of Industry and Trade sent an official dispatch to the Vietnam Food Association and rice export traders regarding the implementation of responsibilities for rice export. The dispatch clearly stated that in order to contribute to the consumption of commercial rice and paddy; ensure the balance between export and domestic consumption; contribute to stabilizing domestic rice and paddy prices; and ensure the goal of national food security.
Accordingly, rice export traders are required to strictly comply with the Government's regulations on rice export business, regularly maintain the minimum circulating reserve level, ensure the balance between export and domestic consumption, and contribute to stabilizing rice prices in the domestic market. Report on the situation of rice and paddy inventory, the situation of signing and implementing rice export contracts according to regulations. Actively monitor the global rice trade market situation, discuss with the Vietnam Food Association, promptly report to the Ministry of Industry and Trade and the Ministry of Agriculture and Rural Development on the situation related to rice export activities in the domestic and international markets and propose appropriate solutions to relevant ministries and branches.
Regarding the balance of supply and demand, price stabilization, and ensuring domestic food security, on August 3, 2023, the Ministry of Industry and Trade issued a document requesting the People's Committees of localities to perform their responsibility of directing the Department of Industry and Trade to urge enterprises participating in the Market Stabilization Program in the area to have a plan for rice and paddy sources to ensure supply to the market from now until the end of the year. Directing rice exporting enterprises in the area to maintain the amount of rice and paddy reserves for market stabilization according to regulations to be ready to supply the market when necessary.
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| Is minimum food stock enough to ensure food security? |
To ensure close coordination between ministries, branches and localities, on August 4, 2023, the Food Association and traders, the Ministry of Industry and Trade chaired and coordinated with the Ministry of Agriculture and Rural Development, and Can Tho City to organize a conference to deploy rice export management. On that basis, they agreed to resolutely implement a group of solutions to ensure supply, stabilize domestic food prices and facilitate and limit risks for rice export business activities in the last months of the year.
Commenting on the recent rice export situation, Associate Professor Dr. Dinh Trong Thinh said that the news that Vietnamese rice is the most expensive in the world is good news first of all, because up to now, Vietnamese rice prices have always been lower than Thai rice prices. However, the high export price of rice will also push up domestic rice prices. Therefore, businesses need to consider and calculate how to do it reasonably at this time, which is a stressful problem.
On the other hand, the price of rice has increased so much that the people who should benefit the most are farmers - the people who directly produce rice, but in reality it is not like that.
Another issue that businesses need to pay attention to is that this price fluctuation only occurs in a short time, increasing and standing at a very high level but then decreasing and returning to equilibrium. This level is often much lower than the peak level. Therefore, businesses need to be very careful, if the business is not alert, "chasing the peak" will lead to "old age and broken rope".
Since the signs of a rice “price storm”, the Ministry of Industry and Trade has directed market management forces nationwide to strengthen coordination with local authorities to closely monitor the situation, inspect and supervise the production, circulation and consumption of rice in the area and maintain the minimum circulating reserve level of rice export traders according to regulations. Minister of Industry and Trade Nguyen Hong Dien also requested strict handling of cases of speculation, illegal profiteering, pushing up rice prices unreasonably high, causing instability in the domestic market.
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