Rice export speed up

Rice exports are benefiting both in volume and price. Photo: NT

Growth in most markets

Speaking at a meeting of the Ministry of Agriculture and Rural Development on the situation of rice exports on July 6, Nguyen NhuTiep, Director of the Department of Quality, Processing and Market Development (Ministry of Agriculture and RuralDevelopment) said that rice exports to most markets recorded good growth, even sudden changes in new markets.

In the first 5 months of 2023, rice exports to most markets increased sharply compared to the same period last year. The Philippines is Vietnam's largest rice consumption market, reaching 772 million USD, up 22.4% over the same period in 2022, accounting for over 40% of the total rice export volume and accounting for 89.6% of the the country's total value rice imports. Exports to the Chinese market after a long period of decline have also increased sharply, by the end of May 2023, this country has spent $ 364.2 million to buy Vietnamese rice, an increase of 79.1% compared to the same period last year.

Indonesia is a market that suddenly rose to the number 3 position in terms of rice export market in the first 5 months of 2023 with a volume of 369,032 tons, an increase of 16 times (1,498%) over the same period last year, with a turnover of 181.4 million USD. In addition, rice export turnover to Chile and Turkey in the first 5 months of the year skyrocketed by 2,930% and 12,843% respectively over the same period last year. Rice exports to a number of markets in the EU also recorded a triple-digit growth such as: Poland up 117.4%, Belgium up 164.9 percent, Spain up 307.6 percent...

Regarding the export price of rice, the average of the first 6 months of 2023 is estimated at 539 USD/ton, up 10.2% over the same period in 2022. Specifically: As of June 23, Vietnam's 5% broken rice has price of 503 USD/ton, an increase of 5 USD/ton compared to the previous 10 days, equal to the price of Thai 5% broken rice and about 15 USD/ton higher than the Indian rice of the same type. Vietnam's 25% broken rice also increased by 5 USD tons to 478 USD/ton, 8 USD/ton higher than rice of the same type of Thailand and about 25 USD/ton higher than Indian rice.

Seize opportunities

Assessing the situation of rice exports in the coming time, Le ThanhHoa, Deputy Director of the Department of Quality, Processing and Market Development, said that global rice trade in 2023 will decrease by 275,000 tons to 55.4 million metric tons, down 1% from 2022. Among them, declines in exports to Argentina, Brazil, Myanmar, China, Pakistan and the US were offset by increased shipments from Australia, Cambodia, India, Thailand and Vietnam. The demand for rice also increased slightly, possibly due to the limit  ed supply of other food sources. Difficult markets such as Europe, Korea, Australia and some newly opened markets in Middle East countries create opportunities to increase the export of high-quality rice when consumers are very interested in high quality Vietnamese rice.

Meanwhile, in the ASEAN region, Vietnam still holds a large market share in the Philippines market because customers are familiar with the quality of Vietnamese rice and Vietnamese rice has a logistics advantage over other suppliers. Vietnam's rice export forecast was raised as exports to the Philippines, China and Indonesia were higher than expected.

According to Bui ThiThanh Tam, Vice President of the Vietnam Food Association, currently exporting rice is very favorable, typically in the next few days, Indonesia will continue to open bids for 300,000 tons and is expected to continuously open bids. This will make rice prices in other countries increase, at least not decrease. Meanwhile, rice prices are currently recording at a high level, input for production is lower than in 2022, so farmers have better profits. In addition, according to the EU-Vietnam Free Trade Agreement (EVFTA), Vietnam is granted a quota of 80,000 tons, of which 30,000 tons of white rice, 30,000 fragrant rice, 20,000 tons of brown rice. Therefore, export rice orders that are in the above list are exempt from tax of ER 175/ton. This is a huge advantage for importers.

However, a representative of the Vietnam Food Association also said that with the situation of producing as much and consuming as much, the General Department of State Reserves is also opening tenders for reserve rice, so the demand for rice is higher. Therefore, besides ensuring year-end achievements, it is also necessary to take into account national food security and inventories for early 2024. Currently, the biggest difficulty for rice exporters is the issue of capital, credit, therefore, Tam suggested that the State Bank consider increasing short-term capital at the time of the main harvest season. At the same time, continue to guide traders to access capital at low interest rates. "Strengthening the policy of unsecured lending, which can only be applied during the harvest time, peak season and based on the appraisal results and business history of each enterprise to have a program suitable loans," suggested Tam.

Agreeing with Tam, from the perspective of being a rice exporter, Truong Sy Ba, Chairman of the Board of Directors of Tan Long Group said, currently, not many rice businesses have been able to borrow medium and long-term loans, mainly short-term capital to purchase when in season. Ba suggested the Government, ministries and branches have more preferential policies for long-term investment because the nature of rice value enhancement lies in the whole value chain, from planting, production, purchasing to drying, post-harvest processing and preservation.