Global food stress forecast to last into 2024, an opportunity for Vietnamese rice

Rice exports are about to reach 8 million tons. Rice export prices continue to fluctuate in opposite directions in the closing session of 2023.

Demand is expected to continue to exceed supply.

In forecasts from the end of 2023, many experts and organizations have stated that in 2024, the global food stress situation will continue to recur due to many reasons.

The El Nino weather phenomenon that caused drought in much of Asia in 2023 is forecast to continue into the first half of 2024. This is forecast to have a negative impact on Asian rice production in the first half of 2024.

Global grain and oilseed inventories are tightening, according to CoBank, a leading US agricultural lender. The northern hemisphere could experience its first strong El Nino weather pattern during the growing season since 2015.

Previously, in 2023, this phenomenon caused a serious decrease in the supply of rice, wheat, palm oil and other agricultural products in the world's leading agricultural exporter and importer. As a result, India - a rice exporter accounting for 40% of global output - issued an order to restrict the export of popular white rice. The country's sudden suspension of supply while the demand for rice was high caused world rice prices to continuously increase and depend on two main suppliers, Thailand and Vietnam.

Căng thẳng lương thực toàn cầu dự báo kéo dài trong năm 2024, cơ hội cho gạo Việt

In 2023, Vietnam will ensure domestic food security while still taking advantage of export opportunities to reach over 8 million tons of rice.

A notable point, according to the forecast of the US Department of Agriculture (USDA), in the 2023-2024 crop year, although global rice production will increase compared to the 2022-2023 crop year, production will still be lower than consumption demand.

Regarding specific figures, according to Ssresource Media Pte. Ltd (Singapore) at the end of 2023, global rice production in the 2023-2024 crop year is likely to reach 517.796 million tons - an increase of 4.441 million tons compared to the 2022-2023 crop year. However, global rice consumption in the 2023-2024 crop year is also forecast to increase by 856,000 tons compared to the 2022-2023 crop year at 522.286 million tons. Thus, demand is increasing more than supply by about 4.5 million tons.

Meanwhile, India will maintain its rice export restrictions and may extend them until the end of the year as the country is still affected by El Nino, which has reduced its crop. This, according to Mr. Subramanian from SSRESOURCE MEDIA (Singapore), will cause the market in 2024 to react favorably to Vietnamese rice.

In fact, at the end of 2023, international experts made many forecasts and affirmed that in 2024, countries such as Indonesia, the Philippines and Malaysia... are forecast to continue to have high demand for rice imports. For example, Indonesia imported about 2.5 million tons of rice in 2023 and could buy an additional 1.5 million tons in 2024.

Opportunities for Vietnamese rice exports

According to analysts, increasing demand while supply shows no signs of improvement will continue to be a "bright door" for rice exporting countries. In fact, in 2023, as soon as India issued a ban on rice exports, Thailand and Vietnam - two countries with a large market share - "benefited". Of which, Thailand - in just 11 months of 2023, exported nearly 8 million tons; and in 2023, according to estimates by the Ministry of Agriculture and Rural Development, Vietnam's rice export output reached over 8 million tons with a record value of 4.78 billion USD.

Therefore, 2024 will continue to be an opportunity for countries with large market shares in the world such as Vietnam. In particular, experts also predict that world rice prices will continue to remain high in 2024 and sellers will still have the advantage in deciding on prices.

“Global rice demand continues to remain high to ensure food security, with countries with high demand including the Philippines and Indonesia. Regarding rice supply, India will continue to maintain restrictions on rice exports in 2024, while climate change continues. These factors will contribute significantly to maintaining high rice prices until mid-2024,” said Mr. Do Ha Nam, Vice President of the Vietnam Food Association.

Note for businesses

The opportunities are huge, but how to continue to take advantage of opportunities and increase exports is a matter of concern for experts and businesses in the industry. This stems from the fact that high export prices have caused domestic prices to increase sharply, even higher than export prices. Along with that, in the last months of 2023, the amount of rice in the population is not much, forcing export businesses to buy at high prices to pay off contract debts or be hesitant in signing new orders, leading many importers to choose other countries to buy rice.

Specifically analyzing, Mr. Phan Van Co - Marketing Director of Vrice Company Limited said that the rapid fluctuation of rice prices in recent times has led to a broken supply chain, broken contracts, and difficulties for exporting enterprises in mobilizing goods to fulfill signed contracts. Not to mention, in the last months of the year, domestic rice sources are almost "exhausted" because enterprises have sold out - which is also a difficulty for enterprises when signing new contracts. "Our current rice price is very high, which is good, but on the other hand, it also causes enterprises to lose opportunities because partners choose importers with more competitive prices" - Mr. Co shared.

In that context, to seize the opportunity, since the end of 2023, many businesses and people in the Mekong Delta have taken the opportunity to plant the winter-spring rice crop. The good news is that Vietnam's winter-spring rice crop is expected to be harvested after Tet - that is, around February - March 2024. Therefore, this will be an opportunity for Vietnamese rice in 2024.

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