Rice exports hit 7.1 million tons last year, the highest level in ten years. Vietnam’s rice export prices continued to rise in the first two months of this year, with an average of more than $519 per ton. Therefore, while rice export volume declined, the price jumped by nearly 7%.
Vietnam’s rice sector is predicted to benefit from high rice prices due to high demand in 2023, and rice enterprises’ profit margins will also grow due to decreased input costs.
According to a Vietnam Joint Stock Commercial Bank for Foreign Trade Securities (VCBS) specialist, natural and beneficial circumstances exist in Vietnam’s rice business. Favorable weather is offering benefits for Vietnamese businesses when compared to competitors.
[Which way for Vietnam’s farm produce?]
Meanwhile, a lengthy drought in China has reduced output by 2% for the 2021-2022 crop year. Therefore, China is likely to raise rice imports by 6 million tons in the 2022-2023 crop year.
Moreover, inventories in the Philippines fell since Typhoon Noru destroyed many of the country’s farmed regions, and the high cost of fertilizers caused the government to boost rice imports. The United States Department of Agriculture (USDA) predicts that the country would need to import 2.8 million tons during the crop year 2022-2023.
Drought has reduced the cultivated land in India by 380,000 hectares; the Kharif crop (harvesting in fall and early winter) is predicted to account for 80% of the country’s production, perhaps reaching 10-12 million tons for the 2022/2023 crop year. Accordingly, the drop in supply in India is the primary element influencing the worldwide rice deficit anticipated for next year.
The hydrological environment in Vietnam is predicted to be relatively steady in the last year, with heavy rain, before gradually shifting to neutral in the first half of 2023, producing stable production. For that reason, VCBS believes that Vietnam would gain from the rising trend in rice prices in 2023 as a result of limited supply and a shift in demand from India.