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Rice export prices soar

07/06/2021

According to the Ministry of Industry and Trade, although the export volume in the first five months of this year decreased by 11.3% compared to the same period last year, in return, the export price of rice increased by 11.9% (average of USD 543 /ton). As a result, rice export turnover in the first five months of 2021 did not decrease much compared to the same period last year, decreased by only 0.7%.

The structure of Vietnam's rice exports is continuing to shift to fragrant rice, high quality rice with higher selling price and added value. Along with that, rice farmers and traders are also increasingly paying attention to improving quality, traceability and towards meeting the strict standards of demanding markets such as the EU, South Korea, and the United States.

In addition, in 2020, Vietnam has expanded and diversified its export markets through agreements such as the EU-Vietnam Free Trade Agreement (EVFTA), EEC, and UKFTA. In 2021, with the preferential tax rates in the above agreements, Vietnamese rice will have competitive advantages and growth opportunities in the EU, UK and member states of the Eurasian Economic Union.

In particular, recently, the Philippine government has decided to reduce the import tax on rice to 35% (previously 40% for rice imported under quota and 50% for rice imported outside of quota) within 1 year to increase rice supply, maintain affordable rice prices and reduce inflationary pressures. This Decision takes effect 15 days after the Office of the President published it in the Official Gazette on May 17, 2021 and has a validity period of one year. This is an opportunity for Vietnamese rice to increase exports to the Philippines - one of the largest markets for Vietnamese rice.

Based on market demand and orders, businesses are of the opinion that in the second quarter of 2021, rice exports are still optimistic. According to Trung An Hi-tech Agriculture Joint Stock Company, rice exports in the second quarter of 2021 are expected to increase by 100% compared to the previous quarter.

According to the Vietnam Food Association, in 2021, more ST25 rice will be produced to sell to the market. Thus, the current supply of ST25 rice is gradually improving while the demand for this type of rice in the markets is still very high. Many businessmen also forecast that ST25 rice is popular in the world, the price is higher than other types of rice, therefore ST25 rice exports will increase this year, adding to the growth rate of rice export turnover.

Analyzing rice exporting countries in the world, the US Department of Agriculture (USDA) recently made a forecast that India continues to be the world's largest rice exporter, expected to export 15.5 million tons, an increase of 940,000 tons compared to 2020. Meanwhile, Vietnam maintains the second position with 6.4 million tons, an increase of 233,000 tons. In third place is Thailand, which is expected to reach 6.1 million tons, an increase of nearly 400,000 tons.

In 2020, Vietnam exported 6.15 million tons of rice, reaching a turnover of USD 3.07 billion, decreased by 3.5% in volume and increased by 9.3% in value compared to 2019.

 

Kylie Nguyen

© 2019 Vietnam Bank for Agriculture and Rural Development No. 2 Lang Ha street, Ba Dinh district, Hanoi, Vietnam
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