Rice export prices are high, why are businesses in the industry still worried about losses?

Vietnam's rice export price is at the highest level in the world.

According to the Vietnam Food Association (VFA), Vietnam's rice export prices this week remain high, fluctuating between 570 and 578 USD/ton for 5% broken rice, along with the prospect of more export orders for delivery in September and October.

Export prices of rice in leading rice producing countries in Asia also increased this week. Specifically, India's 5% broken rice was quoted at 540-545 USD/ton, up from 536-540 USD/ton last week.

The increase in rice prices is good news for farmers, but a big concern for businesses because the export price they signed earlier is lower than the domestic raw material purchase price.

According to preliminary statistics from the General Department of Customs, in July 2024, Vietnam's rice exports increased by 46.3% in volume and 39.7% in value compared to June 2024, but the price decreased by 4.5%, reaching 751,093 tons, equivalent to 451.77 million USD, with an average price of 601.5 USD/ton. In the first 7 months of 2024, rice exports increased by 8.3% in volume, 27.7% in value and 17.9% in price compared to the first 7 months of 2023, reaching nearly 5.3 million tons, equivalent to nearly 3.34 billion USD, with an average price of 630.2 USD/ton.

Rice businesses are still sluggish, stocks are "sluggish", fear of losses...

On the stock exchange, shares of most listed rice companies are still sluggish. LTG shares of Loc Troi Group Joint Stock Company have been moving sideways around the price range of 15,000 - 17,000 VND/share since July.

Other rice stocks were also gloomy. VSF code of Southern Food Corporation - JSC (Vinafood), AGM code of An Giang Import-Export Joint Stock Company (Angimex), TAR code of Trung An High-Tech Agriculture Joint Stock Company (Trung An) had almost no significant changes.

VSF stock price today decreased by 0.4% (at about 31,500 VND/share); AGM code decreased by 0.05% to 2,900 VND/share; TAR code was put on restricted trading list, price only 5,600 VND/share...

The rice industry received a lot of positive information, but rice stocks could not increase, possibly because the business results of many rice enterprises in the first 6 months of 2024 were not as expected.

In the first half of 2024, Angimex only achieved nearly 151 billion VND in revenue, down 53% compared to the same period in 2023. Due to no more revenue from selling Honda vehicles, spare parts, and repair services, while the cost of goods sold plus expenses, Angimex lost 99.5 billion VND after tax, higher than the loss in the same period last year (loss of 57.7 billion VND).

For Trung An, the first half of this year recorded revenue of VND3,419 billion, up 36% over the same period last year. However, due to the cost of goods sold increasing more strongly than the revenue growth, after deducting expenses, Trung An lost VND772 million after tax, while in the same period last year it made a profit of more than VND7.5 billion.

Trung An's auditors refused to give a conclusion on its 2024 semi-annual financial report due to a series of issues awaiting verification.

Vinafood had better business results when it brought in VND 11,242 billion in revenue in the first half of 2024, a slight decrease compared to the same period last year, but thanks to improved gross profit margin and the company cutting some costs, after-tax profit reached VND 20.7 billion, double the same period last year.

Meanwhile, Loc Troi has just announced that it has received the resignation of Mr. Johan Sven Richard Boden - Member of the Board of Directors. Mr. Johan Boden was born in 1971, Swedish nationality, with professional qualifications in General Administration, Sales and Marketing, Operations, Agriculture and Food Processing. In addition to Loc Troi, Mr. Johan Boden is currently the General Director of DenEast Vietnam Co., Ltd., operating in the field of milk processing and dairy products.

Mr. Johan Boden was just elected to the Board of Directors of Loc Troi for the 2024 - 2029 term 2 months ago at the Group's Annual General Meeting of Shareholders. If the resignation is approved, the Board of Directors of Loc Troi will have only 4 members, including Chairman of the Board of Directors Mr. Huynh Van Thon, Mr. Mandrawa Winston Leo, Mr. Vo Tri Thanh and Ms. Vu Hong Trang.

Obviously, rice businesses need to structure and calculate their business to suit the developments of the rice market to take advantage of favorable opportunities.

Obviously, rice businesses need to restructure and calculate their business in accordance with the developments of the rice market to take advantage of favorable opportunities. According to forecasts, Vietnam's rice exports will flourish by the end of 2024 when import demand from traditional customers increases.

Rice exports are expected to continue to do well in the final months of the year and are expected to bring in a record turnover of about 5 billion USD this year. The average export price of Vietnamese rice in the past 7 months has reached 632 USD/ton, up over 18% over the same period last year.

Ministries and sectors recommend that businesses should flexibly adjust their production and business strategies. Rice businesses need to be ready to respond to any fluctuations to ensure efficiency and safety in exports. At the same time, businesses also need to avoid unfair competition such as dumping rice, in order to protect and maintain the stability of the national rice export industry.

Source: https://danviet.vn/gia-gao-xuat-khau-tang-cao-vi-sao-doanh-nghiep-trong-nganh-van-lo-ngai-thua-lo-20240829160008709.htm