Rice export demand increases, Vietnamese rice continues to win bids

"Bright door" for rice export continues to open

According to rice exporters, Indonesia is the second largest importer of Vietnamese rice. The country is currently experiencing a rice shortage for nine consecutive months due to lower domestic production than demand, pushing the retail price of high-quality domestic rice to $1.16/kg, exceeding the government's ceiling price of $0.9/kg. Therefore, the Indonesian government has allowed increased rice imports to "cool down" domestic rice prices.

Mr. Vu Tuan Anh - Chairman of GLE Company said that on March 25, 2024, the State Purchasing Agency Bulog (Indonesia) announced the third international bidding in 2024 to purchase 300,000 tons of 5% broken rice. On the morning of March 27, Bulog announced the winning bid and Vietnam won 108,000 tons of rice in this bidding package.

"Indonesia's total rice import quota in 2024 is up to 3.6 million tons of rice, which is not a small number. In just the first 3 months of 2024, Bulog opened 3 bidding packages to buy a total of 1.1 million tons of rice out of the total 3.6 million tons of rice expected to be imported in 2024. This creates an opportunity for Vietnam's rice exports to continue to flourish" - Mr. Vu Tuan Anh said.

The Philippines is also a country that imports a large amount of Vietnamese rice. Citing information from the Philippine Department of Crop Production, the Ministry of Agriculture and Rural Development (MARD) said that the country imported over 793,753 tons of rice. Of which, Vietnam was the main supplier with over 431,846 tons (Thailand ranked second with over 210,127 tons).

"The US Department of Agriculture (USDA) forecasts the Philippines' rice output at 12.125 million tons, higher than the same period last year. However, this is still a potential market for Vietnam's rice exports," added Mr. Vu Tuan Anh.

Vietnam's rice export supply is abundant.

Vietnam's rice exports are favorable due to abundant supply. Photo: Tan Long

According to the General Statistics Office, the output of winter-spring rice in the Mekong Delta increased by 126 thousand tons (up 1.1%); of which the output of winter-spring rice is estimated at 10.7 million tons, up 65 thousand tons (up 0.6%); the output of summer-spring rice is estimated at 974 thousand tons, up 60 thousand tons (up 6.6%). This is a fairly large number when the winter-spring rice output in the Mekong Delta accounts for over 50% of the country's winter-spring rice output. The abundant supply has caused rice prices to decrease slightly.

A rice exporter in Long An (who asked not to be named) said: Vietnam and Thailand are both in the peak harvest season, with abundant rice resources, so traders are forced to reduce rice prices. This makes rice exporters "breathe easier", because currently the export prices of most countries are decreasing.

Current export price of Vietnamese rice. Source: VFA

Reducing export prices will make it easier to compete when currently, the export price of Vietnamese rice is the lowest among the three traditional rice exporting countries (Vietnam, Thailand and Pakistan. India is currently still temporarily suspending white rice exports).

According to the Vietnam Food Association (VFA), this week, Vietnam's rice export prices decreased by 5 USD/ton. Accordingly, 5% broken rice is exported at 577 USD/ton; 25% broken rice is exported at 558 USD/ton; 25% broken rice is offered at 478 USD/ton.

"5% broken rice is the most popular type of exported rice. This type of Vietnamese rice is currently priced 4 USD/ton lower than the same type of Thai rice and 24 USD/ton lower than Pakistani rice, which will create opportunities for Vietnamese rice at the negotiating table," said Mr. Vu Tuan Anh.

According to the Ministry of Agriculture and Rural Development, in the first 3 months of 2024, rice exports reached 1.37 billion USD, with a quantity of 2.07 million tons, up 40% in value and 12% in volume. The average rice export price reached 661 USD/ton, up 5%.

Source