Agriculture & Food

With the Ukrainian crisis affecting the world's food supply and India taking the initiative to restrict food exports, Vietnam's importance as the world's third rice exporter has become increasingly prominent, and Vietnam's economy has also benefited a lot from food exports.

The International Monetary Fund (IMF) stated on September 30 that the Ukraine crisis has disrupted grain and fertilizer export activities, leading to the worst global food crisis since 2008. Uncertainty in Ukraine has led to unexpected increases in food and fertilizer prices that will force the 48 most food-poor countries to spend an additional $9 billion on imports this year and next, the survey found.

India's recent rice export ban, coupled with extreme weather in many parts of the world, has led to a sharp rise in rice prices. On September 8, 2022, India officially banned the export of broken rice (accounting for 4% of total exports), and imposed a 20% tariff on some other types of non-basmati rice (accounting for 23% of total international trade exports). India is the world's largest rice exporter, accounting for 37% of global rice trade.

The US Department of Agriculture predicts that based on the above reasons, the export volume of Vietnamese rice in international trade will increase. According to data from the General Statistics Office of Vietnam, in the first nine months of 2022, Vietnam’s rice export volume will reach approximately 5.443 million tons, a year-on-year increase of 19.3%; the export value will reach US$2.64 billion, a year-on-year increase of 9.3%. According to the analysis, judging from the results of exporting more than 6 million tons in the first 10 months of this year, in the remaining two months of this year, Vietnam will export at least 600,000 tons per month, and it is expected to export 7.2 million to 7.3 million tons of rice this year. . This is still a positive result for Vietnamese rice, surpassing the figure for 2021, when the export volume in 2021 was 6.2 million tons, earning 3.3 billion US dollars.

In the context of increasing global demand for rice, the efforts of Vietnamese enterprises to diversify the varieties of rice exported are also the driving force behind the increase in Vietnam's rice exports. Not only achieved a high export volume, but also a substantial increase in rice export value. According to data from the Vietnam Food Association, in October, the price of 5% broken rice in Vietnam was US$425 to US$430 per ton, the highest level since November last year. This price is US$48/ton to US$51/ton higher than that of similar rice in India, and US$18/ton to US$23/ton higher than that of similar rice in Thailand. At the same time, the price of 5% broken rice in Thailand fell by US$28/ton, from US$435/ton to US$407/ton, the lowest level since the end of July 2022.

In recent years, it has become normal for Vietnamese rice to be sold at a higher price than Thai rice. The development of Vietnamese rice is later than that of Thailand, but in recent years, it has vigorously developed new varieties and improved production processes, so it is becoming more and more popular with consumers. The high average export price of Vietnamese rice is also due to the recent shift of Vietnamese rice exports to fragrant rice and high-quality rice. The Vietnam Grain Association stated that Vietnamese fragrant rice and high-quality rice are rice varieties that meet market demand and are very competitive with Thai and Cambodian fragrant rice.

The American Research and Markets Company recently released a report, ranking Vietnam as the world's third largest exporter of international rice trade, and believes that Vietnam's rice export volume and export value will continue to grow from 2022 to 2031.

The expansion of rice export is just a microcosm of the rapid development of Vietnam's export industry. Minister of Industry and Trade Nguyen Hong Yen said that in the first nine months of 2022, Vietnam's total import and export volume has reached US$558 billion, with a trade surplus of US$6.5 billion. The total volume of imports and exports of international trade for the year is expected to exceed US$800 billion, and the trade surplus will break through the US$10 billion mark, which is a remarkable achievement in Vietnam's imports and exports.