Some countries ban rice exports, what are the opportunities for Vietnamese rice?
On July 29, the Russian government announced a ban on rice exports until December 31 of this year. The exceptions are the Eurasian Economic Union, Abkhazia and South Ossetia. In addition, the country can still send rice abroad for humanitarian purposes.
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| By 2030, Vietnam will reduce its rice export target to about 4 million tons. |
A day earlier, the Ministry of Economy of the United Arab Emirates (UAE) decided to stop exporting rice for 4 months. This regulation takes effect immediately, applying to all types of rice.
The moves come just a week after the Directorate General of Foreign Trade (a part of the Ministry of Commerce and Industry) decided to stop exports of non-Basmati rice, effective immediately. India is the world's largest rice exporter.
The countries' moves come amid disruptions in global supply chains and inflationary pressures that have shaken many economies, climate change, etc. Countries must therefore take proactive measures to ensure food security and protect domestic markets from price fluctuations.
The impact of El Nino is not limited to any one country but affects rice production in almost all producing countries, said Nitin Gupta, vice president of rice business at Indian agribusiness group Olam.
Statistics show that the price of non-basmati white rice in India increased by nearly 10% in July 2023. If in September 2023, a ton of this type of rice in India cost about $330, it has now reached $450. India is the world's largest rice producer, accounting for more than 40% of global rice exports.
The trend of some countries temporarily banning rice exports has emerged at a time when the world food supply chain is facing many challenges, from climate change, economic recession, consequences of the Covid-19 pandemic, political conflicts... also creating opportunities for countries with potential to export rice, typically Vietnam.
Mr. Nguyen Nhu Cuong - Director of the Department of Crop Production (Ministry of Agriculture and Rural Development) - informed that the Vietnamese rice industry is facing a great opportunity, however, no matter how good the opportunity is, our most important goal is still to ensure food security. Therefore, depending on the market situation and timing, the Government and ministries will have flexible regulation between domestic consumption - reserve - export.
The head of the Department of Crop Production also predicted that in 2023, Vietnamese rice exports could reach more than 7 million tons, but the increase depends on the specific situation.
Keep quality to go the distance
15 years ago (2008), affected by the financial crisis and economic recession on a global scale, Vietnam's rice export price at times reached over 1,000 USD/ton.
With favorable market conditions, businesses believe that this year, rice exports could bring in over 4 billion USD. “Everyone wants to seize the opportunity, I hope that rice prices in the second half of 2023 will continue to be high, and the increase will depend on the market situation . With positive signals, rice exports The whole year of 2023 can reach 4 billion USD , even higher " , Mr. Truong Sy Ba, Chairman of the Board of Directors of Tan Long Group predicted.
There is no need to worry about food insecurity with rice, because ensuring domestic supply has never been a problem compared to our country's production capacity, Mr. Nguyen Duy Thuan - General Director of Loc Troi Group Joint Stock Company said that each year we produce about 42 million tons of rice, of which domestic consumption is only about 14 million tons. We only need to worry about selling all of our production.
Currently, there are 55 countries in the world that produce rice, with overlapping seasons; one country has not produced yet, while another has already harvested. Experts say that the rice industry is affected by factors such as weather, market, politics, etc. However, due to the short season, the price of this commodity can increase very high and quickly, but the cycle usually does not last too long.
Mr. Le Thanh Tung - Deputy Director of the Department of Crop Production (Ministry of Agriculture and Rural Development) - recommends that we should not expect too much about the global rice shortage in the long term to find opportunities to increase rice prices. Opportunities to increase prices sustainably can only focus on quality, food safety and hygiene, and brand. This must still be a long-term strategy for the Vietnamese rice industry.
"It can be said that Vietnamese rice prices are in a rather brilliant growth cycle, however, this "wave" is said to come quickly and go quickly," said Mr. Le Thanh Tung.
According to Prof. Dr. Vo Tong Xuan, the context of 2023 puts Vietnam in a special role and position: how can we take advantage of price opportunities while still ensuring the reputation of responsible suppliers? When demand increases, somewhere, businesses will chase quantity. This is something that needs to be avoided and we should persevere in the direction of quality and brand for long-term development because price fever is only temporary.
In the past 5 years (from 2018 - 2022), rice export volume has maintained over 6 million tons and has tended to increase over the years (respectively reaching 6.1 million tons, 6.36 million tons, 6.24 million tons, 6.23 million tons and 7.1 million tons) with an export value of over 3 billion USD per year. In 2022, rice export volume will reach 7.1 million tons (up 16.3% compared to 2018), export value will reach 3.45 billion USD (up 12.7% compared to 2018). In the first 7 months of 2023, Vietnam exported 4.38 million tons of rice with a value of 2.68 billion USD. |
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