Vietnam, the third-largest rice exporter in the world is witnessing a rise in its rice price. In the first eight months of this year, Vietnam reported a 19 percent year-on-year increase in its rice shipments.
However, Vietnamese 5 percent broken rice, which usually costs less than its Thai peers in export markets, raced past them in October to reach record levels. According to the Ministry of Agriculture and Rural Development of Vietnam, broken rice fetched US$425-430 per tonne which is US$48-51 higher than India and US$18-25 higher than Thailand for similar varieties.
In the first three quarters of this year, Vietnam exported over six million tonnes of several varieties of rice and did a business of nearly US$3 billion. This depicts a 7 percent year-on-year increase as compared to the figures last year.
What’s Behind The Surge In The Price?
The rise in price can be a result of grain shortages around the world, even in major rice-producing countries like Bangladesh. Additionally, India, the largest exporter of rice, is facing a deficit in rice stocks following scarce rainfalls and has restricted its Rice Exports.
In the first nine months of the year, rice continued to occupy the top spot in exports of agricultural products of the country, but the average value decreased significantly compared to the same period last year.
In the latest preliminary statistics of the General Department of Customs of Vietnam, it reported that Vietnam, in September, exported a total of 583,203 tonnes of rice. The shipments were valued at US$275.31 million, with an average value of US$472/ton. The numbers are down nearly 19 percent in both volume and quantity with the average value dipping by 0.1 percent compared to the same period last year.
According to local businesses, this is not the first time Vietnamese rice has fetched higher prices than Thailand’s, but its brand recognition is growing in the world market.
“Vietnamese fragrant rice is still behind Thailand, but it is becoming increasingly popular with foreign consumers,” Pham Thai Binh, general director of Trung An Hi-tech Farming Joint Stock Company based in the southern city of Can Tho, said.
Local firms expect rice exports to remain big and fetch high prices for the next three years since the world is facing climate change and the food supply is falling. Thailand’s rice production is also in a decline.
Conclusion
Vietnam accounts for 7.8 percent of the global rice trade and is the third largest rice exporter in the world. Vietnamese rice is sold to rice importers in 28 countries around the world, mainly in Asia and Europe. Being a big player in the global market makes it vulnerable to minor fluctuations in price or trade policies. Although, it is not clear what’s behind the price surge it is clear that the price hike would reflect on a large scale in the world market.
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