Great Expectations, Risk Warning

Many businesses expect to exceed their rice export target in 2024 and earn more than 5 billion USD.

Vietnam's rice exports have made great strides in recent years. (Source: tienphong.vn)

Export turnover prospect of over 5 billion USD

According to the report of the Ministry of Agriculture and Rural Development, in the first 7 months of 2024, Vietnam exported 5.18 million tons of rice with a turnover of 3.27 billion USD, up 25.1% in volume and 5.8% in value over the same period last year. The rice sowing area reached 6.25 million hectares, up 0.2% over the same period last year; harvested 3.82 million hectares, up 1.3%; average yield was 65.6 quintals/ha, up 0.5 quintals/ha; rice output on the harvested area reached 25 million tons, up 2%. This growth not only reflects the continuous efforts of Vietnamese enterprises in improving product quality and expanding the market but also opens up great expectations for rice exports in the second half of 2024.

Chairman of the Vietnam Food Association Nguyen Van Nam shared: “Vietnam's rice exports have made great strides in recent years. We have made constant efforts to improve product quality, diversify types of exported rice and expand new consumption markets. As a result, Vietnam has affirmed its position as the world's number one rice exporter.”

With impressive results in the first half of the year, businesses and experts expect Vietnam's rice exports to continue to flourish in the second half of 2024.

Currently, global food consumption and reserves remain high, while supply is tight due to the impact of economic and political instability and climate change. With the increasing demand for rice imports from many countries, especially from traditional markets for Vietnamese rice such as the Philippines, Indonesia, Malaysia and some African countries, the export price of rice will recover and continue to bring great opportunities for Vietnamese rice exporting enterprises in particular and the opportunity to develop the Vietnamese rice industry in general.

In the Philippines, rice imports are forecast to reach 4.5 million tons in 2024, higher than previously forecast. Vietnam currently accounts for 85% of the imported rice market share here. Indonesia forecasts that the country's rice import demand will increase to 5.18 million tons in 2024, creating great opportunities for Vietnamese rice exporters. Vietnamese rice exporters are also actively expanding to new markets such as Africa and the Middle East to take advantage of the increasing demand.

In the June 2024 report of the US Department of Agriculture (USDA), this agency continues to forecast Vietnam's rice exports in the 2024-2025 crop year at about 7.5 million tons, mainly due to the good demand for rice imports from some Asian and African countries in the context of extreme weather due to the impact of La Nina due to climate change. While the demand for rice from many countries in the world is increasing, due to the impact of climate change, the global rice supply is somewhat tighter than before.

Rice exports from some major exporting countries such as Thailand in the 2024-2025 crop year may continue to be limited due to drought conditions under the impact of the El Nino phenomenon. This context supports Vietnam's domestic and export rice prices to not fall sharply and may recover in the coming time.

It is expected that Vietnam's rice exports in 2024 can continue to maintain the mark of over 8 million tons - the rice export record that Vietnam achieved in 2023, and will also bring in outstanding export turnover, reaching the target of over 5 billion USD.

There are still many unpredictable factors.

However, according to the National Center for Hydro-Meteorological Forecasting, in the second half of 2024, the number of storms and tropical depressions may be approximately equal to the annual average and is likely to be concentrated in the second half of the rainy and stormy season. From July to September 2024, storms and tropical depressions will affect the northern provinces, and from September to December 2024, they will affect the central provinces and the southern region. Therefore, localities need to promptly update hydro-meteorological forecast information and take proactive measures to prevent natural disasters and minimize impacts on rice production.

On the other hand, India currently exports more than 40% of the world's total rice. If India lifts or relaxes the export ban, it will push rice prices in major exporting countries in the world down to quite low levels, including Vietnam.

In addition, Indian officials have also proposed reducing the 20% export tax on parboiled rice. Analysts say that any decision by India to ease exports could help cool down the price of standard rice in Asia. Therefore, the competitive pressure on Vietnamese rice exporters will be even more intense, while they are still competing with other major rivals such as Thailand and Pakistan.

Director of the Department of Crop Production (Ministry of Agriculture and Rural Development) Nguyen Nhu Cuong commented that the world's rice demand is still there and there is no surplus, so if India lifts the white rice export restriction, it will have little impact on Vietnam's exports. However, adjusting India's rice export ban will bring many fluctuations to the global rice market. Vietnamese enterprises need to closely monitor the situation to be able to proactively respond and seize opportunities in the coming time.

Deputy Director of the Import-Export Department (Ministry of Industry and Trade) Tran Thanh Hai said that currently, rice prices have been adjusted down, but they are still at a relatively high level, still favorable for our enterprises to export. Vietnamese rice exporting enterprises must always be ready to prepare for all possibilities and situations. The important factor here is still how to ensure and maintain the quality of rice between shipments. Next, we must ensure the competitive factor, avoiding unfair competition to devalue rice. Because that will also affect not only one enterprise but also many of our rice exporting enterprises.

Source: https://baoquocte.vn/xuat-khau-gao-cuoi-nam-2024-ky-vong-lon-canh-bao-yeu-to-rui-ro-281316.html