|Vietnam’s rice output in 2022 will reach over 43 million tons, and rice output for export will reach about 6.5-6.7 million tons. Photo: collected|
Exports increase in both volume and value
According to the Ministry of Agriculture and Rural Development, the volume of rice exports in October 2022 was estimated at 700 thousand tons with a value of US$ 334 million, bringing the total volume and value of rice exports in 10 months of 2022 to 6.07 million tons and US$ 2.94 billion respectively, up 17.2% in volume and 7.4% in value over the same period in 2021.
In the first nine months of 2022, the Philippines will be Vietnam’s largest rice-consuming market, with a 43.9% market share. Rice exports to this market reached 2.47 million tons with a value of US$ 1.14 billion, up 35.3% in volume and 22.2% in value over the same period in 2021. Meanwhile, the market with the highest increase in rice export value is Ivory Coast (up 71.2%). In contrast, the market with the largest decrease in rice export value was Ghana (down 32.8%).
Put on a comparison scale, a representative of the Institute of Policy and Strategy for Agriculture and Rural Development (MARD) said that in October 2022, the price of Thai rice exports fell to its lowest level in nearly three months due to the weakness of the baht and demand falls. Meanwhile, rice prices in Vietnam and India were steady near the highest level in many months due to supply concerns.
In Thailand, the price of standard 5% broken rice decreased by US$ 28 per ton, from US$ 435 per ton to US$ 407 per ton – the lowest level since the end of July 2022. Traders attributed the drop in rice prices to lower demand in both domestic and export markets in the absence of supply disruptions due to flooding. In addition, the Thai baht has traded near its lowest level since 2006 against the dollar because of persistent concerns about global growth and a recession.
In India, the price of 5% broken parboiled rice in October 2022 decreased slightly by US$ 2 per ton, from US$ 376 – 384 per ton to US$ 374 – 382 per ton. Rice prices fell due to reduced consumer demand and rice quality was affected by heavy rains. Days of heavy rains in India have damaged rice fields just before harvest in the main rice-growing states such as Uttar Pradesh, West Bengal and Andhra Pradesh. Meanwhile, the price of 5% broken rice in Vietnam was unchanged at US$425-430 per ton, the highest level since November 2021.
Ms Doan Xuan Khanh Quyen, Deputy General Director of Vietnam Rice Co., Ltd (Vinarice), shared that the price of rice in the domestic market, especially in the Mekong Delta in the early days of November 2022, continuously increased. In about 50-60 days, new rice had been asked about the price and deposit traders in many areas. “Compared to the peak price in October 2022, the price of rice for export continues to increase by an average of US$ 10 – 20 per ton”, Quyen said.
Around the story of rice prices, Mr. Pham Thai Binh, General Director of Trung An High-tech Agriculture Joint Stock Company, assessed that in recent years, there have been many times when the price of Vietnamese rice was higher than that of Thailand. This is because Vietnamese rice was behind Thailand but developed wide new rice varieties, improving production processes. At the same time, the freshness of Vietnamese rice was higher than that of Thai rice of the same type, so it was increasingly popular with consumers.
High export prices until the end of 2022
According to the Institute of Policy and Strategy for Agriculture and Rural Development, Vietnam’s rice industry has been shifting from low-grade rice to high-quality rice in recent years. As a result, rice exports to “fastidious” markets recorded strong growth.
The leader of Trung, An Hi-tech Agriculture Joint Stock Company, added that “fastidious” markets such as Europe and Korea were very fond of high-quality Vietnamese rice. New orders were constantly being signed. Trung An Hi-tech Agriculture Joint Stock Company had just won a contract to export 20,000 tons of rice to Korea with a value of more than US$ 9 million expected to be exported in early 2023.
Representatives of some rice exporting enterprises said that increasing export rice prices will continue until the end of December 2022. This is because severe weather in many Asian countries (which accounts for 90% of global rice production) and climate change and severe drought in the US, Europe, and China (markets with the greatest demand for rice in the world) are putting the rice supply in shortage. Besides, India’s 20% tax on rice exports is also an opportunity for Vietnam’s rice export industry in the last months of the year.
From 2017 to 2018, India only exported about 8-9 million tons of rice per year, then the export price of Vietnam’s rice was quite good. However, in 2021 when India raised its export rice output to over 21 million tons, the price of rice dropped sharply. It can be said that India is a very “heavy” competitor in rice export competition in the mid-range segment with Vietnam. Therefore, the fact that this rice exporting powerhouse imposes a 20% tax on exported rice will make the price of Indian rice more expensive than many other exporting countries, creating an opportunity for Vietnamese rice to regain its former markets dominated by Indian rice.
Regarding the goal of rice export for the whole year 2022, Deputy Minister of Agriculture and Rural Development Phung Duc Tien affirmed: “In 2022, the rice cultivation area will reach over 7.2 million hectares as planned, the whole year paddy output is over 43 million tons, the amount of rice for export is about 6.5 – 6.7 million tons. Therefore, rice export turnover for the whole year is likely to reach about US$ 3.2-3.3 billion.