Vietnam’s Rice Export Surges Amid Global Demand

Amidst the persistent fluctuations in supply and pricing observed last year, the global rice trade remains vibrant as we step into the new year. Forecasts indicate that this year will mark the second consecutive period where rice exports from Vietnam surpass 8 million tonnes, generating approximately US$5 billion in revenue.

The decreasing global rice supply has spurred increased import activities in several countries including the Philippines, Indonesia, China, and various other markets, all aiming to secure their food reserves. This trend presents favorable conditions for Vietnamese rice exports in the current year.

The heightened activity in the global rice market stems from multiple factors such as limited supply due to adverse weather conditions, export restrictions in some countries, escalating import demands in numerous markets, and tensions in the Red Sea region. As a result, the rice market is witnessing increased momentum.

Projections for the 2023-2024 crop year indicate a decline in global ending inventories to more than 167 million tonnes, marking an 8.6 million-tonne reduction compared to the previous crop year, and the lowest inventory level recorded in the past six crop years.

A farmer harvests rice on a rice paddy field outside Hanoi, Vietnam. Photo: Reuters

India, being the largest exporting country with an annual rice export volume exceeding 20 million tonnes, has imposed policies restricting rice exports since mid-last year. Consequently, many countries are turning to alternative sources of rice supply, particularly from Southeast Asia, thus creating opportunities for Vietnam to expand its exports and secure competitive pricing.

Vietnam’s rice exports exceeded $4 billion last year, and this figure is expected to rise further this year. Nguyen Anh Son, Director of the Import-Export Department at the Ministry of Industry and Trade (MoIT), attributes this growth to significant advancements in both production techniques and export strategies within Vietnam’s rice industry. These improvements have bolstered market expansion efforts and elevated the reputation of Vietnamese rice internationally.

Select markets such as Europe, the US, South Korea, and emerging markets in the Middle East are showing a preference for high-quality Vietnamese rice. In light of this, MoIT emphasizes the importance of information sharing and collaborative efforts between localities and rice industry associations to drive market development initiatives.

The Philippines, one of the key importers, is expected to increase its rice imports this year due to a drought affecting domestic rice production. Similarly, China, Vietnam’s third-largest rice import partner, is anticipated to ramp up imports to ensure food security.

Nguyen Ngoc Nam, Chairman of the Vietnam Food Association, underscores the importance of strengthening information dissemination regarding import-export data to maintain a favorable balance between rice supply and demand. Additionally, efforts to conduct market research and implement trade promotion programs are crucial to seize opportunities in various markets.

Moreover, negotiations for preferential trade agreements with potential markets are underway to leverage existing agreements and expand Vietnam’s rice export quotas. It is imperative to raise awareness among traders regarding the implementation of free trade regulations to ensure sustainable production and export practices in Vietnam.

Despite challenges in supply, Vietnam’s rice exports remain robust, with positive growth observed in the first two months of this year. With a presence in over 180 countries and territories, including discerning markets like Europe, the US, South Korea, and Australia, Vietnamese rice continues to maintain its global appeal and competitiveness.

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Source: Vietnam Insider