Agriculture & Food

Under the circumstances that the crisis in Ukraine has affected the world's food supply and India has actively restricted food exports, Vietnam's importance as the world's third largest exporter of rice in international trade has become increasingly prominent, and Vietnam's economy has also benefited a lot from food exports.

The International Monetary Fund (IMF) said on September 30 that the Ukrainian crisis interrupted the export of food and fertilizer, leading to the worst global food crisis since 2008. The survey results show that the unstable situation in Ukraine has led to an unexpected increase in the price of food and fertilizer, leading to an additional US $9 billion for imports in 48 countries with the most food shortages this year and next.

The recent ban on rice export in India, 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 the total exports) and imposed a 20% tariff on some other types of non-Basmati rice (accounting for 23% of the total exports of international trade). India is the world's largest rice exporter, accounting for 37% of the global rice trade.

The United States Department of Agriculture predicts that Vietnam's international rice export volume will increase based on the above reasons. According to the data of Vietnam's General Bureau of Statistics, Vietnam's rice export volume reached 5.443 million tons in the first nine months of 2022, up 19.3% year on year; The export volume reached 2.64 billion US dollars, up 9.3% year on year. According to the analysis, from the result that more than 6 million tons have been exported in the first 10 months of this year, Vietnam will export at least 600000 tons of rice each month in the remaining two months of this year, and it is estimated that 7.2 million tons to 7.3 million tons of rice will be exported this year. This is still a positive result for Vietnam's rice, exceeding the figure in 2021. In 2021, the export volume was 6.2 million tons and the foreign exchange was 3.3 billion dollars.

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

In recent years, the price of Vietnamese rice is higher than that of Thai rice. The development of Vietnamese rice is later than that of Thailand, but in recent years, Vietnam has vigorously developed new varieties and improved production processes, so it is increasingly 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 Food Association said that Vietnam's fragrant rice and high-quality rice are rice varieties that meet the market demand and are highly competitive compared with the fragrant rice of Thailand and Cambodia.

Research and Markets of the United States recently released a report, which rated Vietnam as the world's third largest exporter of rice in international trade, and believed that Vietnam's rice exports and exports will continue to grow from 2022 to 2031.

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