Rice exports: Prolonging growth momentum

Loc Troi rice is on its way to export to Europe. Photo: TL

Increase in both quantity and price

Statistics from the General Department of Customs show that, in the first quarter. However, many key commodities fell sharply. Rice exports reached more than 1.85 million tons of rice, worth USD 981 million, up more than 23% in value and increased by 34% in turnover over the same period in 2022. In particular, the average export price of rice reached 529 USD/ton, up nearly 9% compared to the average in the same period in 2022. Many times in the months, the export price of 5% broken rice ranked first in the world, higher than that of the same type of Thailand and India.

According to the Import-Export Department (Ministry of Industry and Trade), the rice export market in the first quarter recorded impressive growth compared to the same period last year. This strong growth came not only from Southeast Asian markets (the Philippines increased by 33% over the same period in 2022; Indonesia increased by 180 times; Singapore increased by 30.7%) but also from markets in Southeast Asia (China nearly doubled; Taiwan tripled).

Africa is the second largest export market in the region, reaching more than 157 thousand tons, accounting for 8.5% of total rice exports, down 50.4% over the same period in 2022. In the European market, although accounting for only a tiny proportion (about 1.7%) of Vietnam's total exports still reached 32 thousand tons, a good growth of nearly 11% compared to the same period in 2022.

​Especially the EU region (preferring fragrant rice lines -ST, high quality) continues to have strong growth such as The Netherlands (reaching 4.6 thousand tons, two times higher than the same period in 2022) ); Poland (reached 1.5 thousand tons, increased two times); Belgium (reaching 1.5 thousand tons, up 58.5%). This shows that the quality of Vietnam's rice is increasing, meeting the requirements of difficult markets, and shows the potential to expand the market share of high-quality rice in Vietnam.

Notably, Vietnamese rice exports often recorded growth from volume in the past. Recently, the price of Vietnamese rice exports has increased to a peak of more than two years due to scarce supply, along with many markets are concerned about the possibility of output being affected by the El Nino weather phenomenon. As a result, Vietnam's 5% broken rice price was offered for sale at an average of USD 498/ton, the highest level since April 2021. In particular, the average export price of rice to China reached USD 589/ton, an increase of more than 18% over the same period last year.

According to the Vietnam Food Association, the price of many types of rice in Vietnam is still higher than that of Thailand and India. Specifically, the price of Vietnam's 5% broken rice in the first weeks of June 2023 reached about USD 498/ton, while the cost of rice from Thailand and India was USD 492/ton and USD 453/ton, respectively. In 2023, the rice output of the whole Mekong Delta region is expected to reach more than 24 million tons. This will be a large source of commodity rice for processing and exporting enterprises.

​Developing in the direction of economic commodity chains

According to many experts, the demand of markets such as the Philippines, Africa and many other countries is also increasing when they have to actively replenish food stocks in the context of the world's economic instability and politics. In addition, many forecasts show that climate change is complicated in many countries, such as EL Nino, which may cause a drought in the middle of the year in Indonesia, which will affect food production in the future. Therefore, countries are increasing their purchases to replenish their reserves.

Limited supply in the context of strong import demand from many countries has made Vietnam's rice exports 2023 exciting at the beginning of the year. In particular, rice prices can remain high for a long because world demand has exceeded supply, while global rice inventories have continuously decreased recently. Forecasting the market situation in the second half of the year, many businesses said that capital markets that are considered complex and some newly opened markets in the Middle East countries are creating opportunities for Vietnamese businesses to increase export when consumers are very fond of high-quality rice from Vietnam. The last six months of the year and many positive support measures will help Vietnam's rice exports prolong their growth momentum.

In order to facilitate the promotion of rice exports, Deputy Prime Minister Le Minh Khai recently signed Decision No. 583/QD-TTg to approve the Strategy to develop Vietnam's rice export market until 2030 (Strategy). The overall objective of the Strategy is to develop and diversify rice export markets with a reasonable, stable and effective scale, market structure and product structure; consolidate traditional and key export markets and develop new and potential export markets that have signed Free Trade Agreements (FTAs); increasing market share of Vietnamese rice in export markets, especially in developed countries. Accordingly, by 2030, Vietnam's rice exports will be enhanced in value, and at the same time, the export volume will be reduced to 4 million tons with an export turnover of about USD 2.62 billion.

At the same time, linking the export market with domestic products according to the value chain, ensuring the quality and safety of exported rice; increasing the introduction of Vietnamese rice products and products processed from rice into direct distribution channels in markets; export rice and rice-based products with high quality and value, improve value, ensure sustainable export efficiency, affirm the prestige and brand name of Vietnamese rice.

According to the Minister of Agriculture and Rural Development, Le Minh Hoan, for many years, the rice industry has followed the production mindset of taking output as a goal and implementing all solutions to increase output. Still, it does not mean helping people improve their income, even if it is the contrary. To achieve the above goal, rice production must become an economic commodity chain because there will come a time when the output will decrease, and the area will be narrowed, so it must increase in quality and value.

"The goal of the rice industry must follow that direction. It means a commodity ecosystem must be reorganized with full participation, from scientists, businesses, cooperatives, to farmers and local authorities to promote efficiency", said Minister Le Minh Hoan.