|Vietnamese branded rice on the shelves of French supermarkets. Photo: T.L|
Fragrant rice is on the throne
Nguyen Thanh Huan, Deputy Director of An Giang Department of Industry and Trade, said that this locality exported 90,000 tons of rice with a value of US$ 50 million in the first two months of 2023.
Compared to the same period last year, An Giang’s rice exports increased by about 8% in volume and 10% in value. Mr. Pham Thai Binh, General Director of Trung An High-Tech Agriculture Joint Stock Company, also said that the company’s rice export orders were quite good this year. In particular, in the first quarter of 2023 alone, the company signed a contract to export 30,000 tons of rice to the markets of Singapore, Malaysia, Korea, and Europe.
In particular, according to the forecast of Mr. Nguyen Viet Anh, General Director of Phuong Dong Food Company, there might be a shortage of fragrant rice for export. In recent months, Phuong Dong Food Company had faced many difficulties in purchasing fragrant rice for export orders.
Mr. Tran Minh Kiet, Deputy Director of the Department of Industry and Trade of Can Tho City, also said that from the beginning of the year until now, rice exporters in the area were focusing on implementing contracts that must be delivered and signing new contracts, mainly fragrant rice and exported to markets such as Philippines, Ghana, Cameroon, Ivory Coast, Korea.
It is expected that in 2023, Can Tho’s rice export output would reach nearly 814,000 tons, with a turnover of over US$ 384 million, of which fragrant rice would account for a large proportion.
In 2022, the demand for fragrant rice had increased sharply compared to previous years. Mr. Nguyen Ngoc Nam, Chairman of the Vietnam Food Association, explained that the reason was the increased production of fragrant rice in Vietnam, competitive prices and especially being able to meet the diverse consumption demand of markets.
Notably, Dai Thom 8 rice recorded an increase of nearly 1.5 times compared to 2021, reaching nearly 2.9 million tons and accounting for 40.78% of Vietnam’s total exports. Similarly, some other fragrant rice also had strong growth, such as OM5451 rice up 49%, and fragrant broken rice up 68%.
The growth of the demand for fragrant rice is evident in the Philippines market – the largest export market of Vietnamese rice when accounting for 45% of the total volume and 43% of the total rice export turnover of Vietnam. In 2022, Vietnam exported 3.21 million tons of rice to the Philippines, an increase of nearly 31% compared to 2021.
High price, favourable market
Vietnam’s rice exports ended 2022 more optimistically than expected thanks to positive demand from traditional markets such as the Philippines, China, Bangladesh, and Africa.
Notably, rice exports to the EU market recorded outstanding growth at 94,510 tons of rice and exceeded the annual quota of 80,000 tons of rice given to Vietnam by the EU under the commitments from the EVFTA. Similarly, rice exports to CPTPP markets also reached 578,596 tons, worth over US$ 280 million, up over 31% in volume and nearly 20% in turnover.
In 2023, experts forecast that rice exports will continue to be favourable because rice prices in the short term remain at a good level due to global economic and political instability, making the need of the countries for food reserves to ensure food safety increase.
According to FAO, the proportion of countries and regions that are not food secure accounts for 30.4% of the world’s population. Therefore, nearly 30 countries have tightened, limited or suspended food exports to protect domestic supplies.
According to a forecast by the US Department of Agriculture (USDA), global rice trade in 2023 will decrease by about 4% compared to the same period in 2022. Exports are forecasted to decrease simultaneously in Argentina, Brazil, Cambodia, China, the European Union, India, Laos, Malaysia, Pakistan, Paraguay, Russia, Senegal, Tanzania, Turkey, Uruguay and USA.
In which, India and Pakistan decreased the most (about 2.1 million tons) due to reduced output and stabilization policies for the domestic market. Specifically, India has applied a ban on exporting broken rice and imposed a 20% tax on white rice varieties.
Vietnam’s rice industry also has high expectations for the reopening of the Chinese market. In January 2023, Vietnam’s rice exports to China reached 47,000 tons, up 13.2% over the same period in 2022. It is forecast that this year, the demand for importing Vietnamese rice into the Chinese market will return.
Mr. Nguyen Phuc Nam, Deputy Director of the Asia-Africa Market Department, Ministry of Industry and Trade pointed out that with a close geographical distance, Vietnamese enterprises had many advantages in the Chinese market compared to their competitors. In particular, China was tending to use rice bran to replace corn and wheat in livestock because the prices of these commodities were very high. Therefore, this was an opportunity for enterprises to promote rice bran exports to this market.
Besides the positive signals from the market, the movement of export rice prices also recorded many positive signals. From the last months of 2022, Vietnam’s export rice price recorded growth and remained at a high level in the first two months of 2023.
In particular, for many months from August 2022, the export price of rice was 5%. Vietnam’s broken rice is always at the highest level in the world, higher than the average export price of Thailand’s rice from 15-27 USD/ton, 40-50 USD/ton higher than India’s export price. Currently, the export price of Vietnam’s 5% broken rice is at the same level as that of Thailand, about $463-467/ton.
Ms. Vo Phuong Thuy, Deputy Director of Dong Thap Department of Industry and Trade:
Since the beginning of 2023, there have been good signs from the Chinese market. However, currently, the number of enterprises in the country as well as in Dong Thap that are exporting to the Chinese market is still very limited, there are only 22 enterprises in the country, of which only one is in Dong Thap. Recently, the Chinese side inspected and appraised the factory, but since the outbreak of the Covid-19 pandemic, this operation has not been resumed. Therefore, the Ministry of Industry and Trade should coordinate with the Ministry of Agriculture and Rural Development to negotiate with the Chinese side to support and facilitate the licensing of rice enterprises to export to the Chinese market.
Mr. Nguyen Thanh Huan, Deputy Director of An Giang Department of Industry and Trade:
The overseas Vietnamese trade agency is a very good trade promotion channel, An Giang is exploiting this channel quite thoroughly and with high efficiency. Specifically, in 2022, through the overseas Vietnamese trade agency, An Giang’s enterprises brought Vietnamese rice into the French distribution channel. This is the bright spot of An Giang rice industry in 2022.
Mr. Nguyen Ngoc Nam, Chairman of Vietnam Food Association:
In 2022, the position of Vietnamese rice has become more prominent when Vietnam increases its supply to the world market in the context of a global food security crisis after the Russia-Ukraine conflict as well as the policy of limiting India’s rice export being implemented in September 2022. In particular, Vietnam has once again affirmed its position as an efficient and leading supplier to the world’s largest rice-consuming country, the Philippines, through a national trade promotion delegation to Manila in September 2022. In addition, Vietnamese rice grains are also more present in difficult markets in Europe thanks to the effective utilization of bilateral and multilateral agreements.