| India's rice export ban: Latest moves Rice price today, August 3: Paddy price increased by 100 VND/kg, rice price decreased by 50 - 150 VND/kg |
Rice exports increased 25.1% in volume
According to a report by 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.
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| Rice exports earn 3.27 billion USD in 7 months |
In the first 7 months of the year, the rice planting 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%.
The domestic rice market on August 3, 2024 recorded moderate transactions in localities. Specifically, in Can Tho, the demand for Autumn-Winter rice was quite high, and transactions were stable. In Long An, the demand for rice was quite high, and the quality of rice was good. In An Giang, new rice transactions slowed down due to the lack of available rice and high prices.
The price of IR 50 404 rice fluctuates around 6,900 - 7,000 VND/kg; Dai Thom 8 rice is at 7,400 - 7,600 VND/kg; OM 5451 rice is at 7,000 - 7,200 VND/kg; OM 18 rice is at 7,400 - 7,600 VND/kg; OM 380 rice fluctuates from 6,800 - 7,000 VND/kg; Nhat rice is at 7,800 - 8,000 VND/kg; Nang Hoa 9 is at 6,900 - 7,000 VND/kg, and Nang Nhen rice (dry) is at 20,000 VND/kg.
Regarding rice, the price of raw IR 504 Summer-Autumn rice is at 11,100 - 11,250 VND/kg; finished IR 504 rice is down to 13,300 - 13,400 VND/kg.
Vietnam's rice export prices remained unchanged from yesterday. According to the Vietnam Food Association (VFA), the price of 5% broken rice remained stable at $559 per ton; 25% broken rice at $535 per ton.
Compared to a year ago – when the rice market was bustling due to the impact of India’s rice export ban – the current rice price is also at the same level. The rice market has almost established a new price level.
However, the export price of rice compared to a year ago recorded a slight decrease. Specifically, on August 3, 2023, the export price of 5% broken rice from Vietnam was at 593 USD/ton; 25% broken rice was at 573 USD/ton.
The market is still very cautiously waiting for policies from India.
In its July 2024 rice outlook report, the US Department of Agriculture (USDA) raised its forecast for global rice trade in 2024 by 500,000 tons to 55.3 million tons and for 2025 also at a high level, at 54.3 million tons.
In the July 2024 grain market report of the International Grains Council (IGC), this unit forecasts global rice trade in the 2024/2025 crop year at 53 million tons, an increase of 1 million tons compared to the forecast previously given by ICG.
The global rice trade is forecast to continue to increase. This will impact the Vietnamese rice market. However, rice exporting enterprises are still waiting for India's policy on the rice export ban. All buying/selling decisions made by enterprises at the present time are very cautious.
According to rice exporting enterprises, although there is market demand, new contracts are still quite reserved at the moment. Not only that, enterprises are also facing the situation where some partners are asking to buy with the purpose of… “probing the price”.
India currently exports more than 40% of the world's total rice. If India lifts or relaxes the ban on rice exports, it will "pull" rice prices in major exporting countries in the world down to quite low levels, including Vietnam.
Buyers are waiting, sellers are waiting, making the rice export market seem quite quiet at the moment. Accordingly, Vietnamese rice is offered for sale at 5% broken rice (FOB price) at the present time at only about 559 - 563 USD/ton; Thailand is 566 - 570 USD/ton; Pakistan and Myanmar are at 574 - 578 and 565-569 USD/ton, respectively, the lowest prices since the end of 2023.
While the export market is “on hold” and waiting for India’s move, export businesses are also facing difficulties in purchasing rice in the domestic market as rice prices fall, warehouses limit milling and supply to the market, and rain delays the summer-autumn rice harvest.
Signing an export contract and then purchasing rice in the domestic market is considered quite risky at this time. Industry experts recommend that businesses should focus on purchasing summer-autumn rice to have inventory before signing contracts. Obviously, any decision made by businesses at the present time in the context of current market developments is considered "gambling".
In the current context, the Import-Export Department (Ministry of Industry and Trade) also recommends that rice exporters closely monitor the world and domestic rice markets, and carefully and confidently calculate prices for export shipments to ensure business efficiency and maintain the reputation of Vietnamese rice.
However, experts also said that Vietnam's biggest rice crop of the year has passed, and the market trend from now until the end of the year is that Vietnamese rice prices are unlikely to fall further, even if India returns. Because demand in many markets is still increasing.
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 its rice import demand to increase to 5.18 million tons in 2024, creating great opportunities for Vietnamese rice exporters.
The summer-autumn crop, with an estimated yield of 6.2 tons/ha, will continue to support rice exports. Vietnamese rice exporters are also actively expanding to new markets such as Africa and the Middle East to take advantage of increasing demand. It is expected that the country's rice production in 2024 will reach 43 million tons, ensuring domestic consumption and exporting about 8 million tons, earning more than 5 billion USD as the set target.
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