Vietnamese rice exporters expect higher prices

With India’s recent rice export restrictions, Vietnamese exporters expect to increase shipments and prices, industry insiders said.

Nguyễn Quang Hòa, director of Dương Vũ Co Ltd (Long An province), said India had imposed a 20% export tax on grain and banned shipments of broken rice to drive down prices interior following a significant drop in production due to a bad monsoon.

For all the latest news, follow the Daily Star’s Google News channel.

The move would affect the global market for one of the most consumed staple foods amid soaring commodity prices following the protracted conflict between Russia and Ukraine.

It would also encourage buyers to turn to rivals such as Vietnam and Thailand, which are struggling to boost exports and prices, he said.

“Vietnamese rice exporters are holding back deals, expecting the price to rise.”

Nguyễn Văn Đôn, director of Việt Hưng Co Ltd (Tiền Giang province), said prices of rice of all kinds have already increased by an average of 300 VNĐ per kilo compared to before the Indian restrictions.

Vietnamese rice exporters hold back deals, expecting price to rise

Nguyễn Văn Hiếu, Export Manager of Lộc Trời Group, said grain shipments are also expected to increase in the remaining months, largely due to strong demand from countries such as the Philippines, China and the EU.

The protracted conflict between Russia and Ukraine has led to wheat shortages and soaring food prices in the EU. European and South American countries are also experiencing production difficulties.

To compensate for this shortfall, European countries are likely to buy rice from Việt Nam and other rice producers, according to Hiếu.

Dr. Nguyễn Đăng Nghĩa, director of the Southern Center for Soil Fertilizer and Environmental Research, said global demand for rice is expected to continue rising this year.

Deputy Agriculture and Rural Development Minister Phùng Đức Tiến said Việt Nam is expected to export 6.5 to 6.7 million tonnes in 2022 for $3.3 billion.

BV Krishna Rao, chairman of the Indian Rice Exporters Association, was quoted by Reuters as saying: “The [export] the duty will affect white and brown rice, which account for more than 60 percent of India’s exports.

“With this right, shipments of Indian rice will become uncompetitive. Buyers will move to Việt Nam and Thailand.”

India accounts for more than 40% of world rice exports and competes with Việt Nam, Thailand, Pakistan and Myanmar in the world market.

Its exports reached a record 21.5 million tonnes last year, more than the combined volumes of the next four major exporters, Thailand, Vietnam, Pakistan and the United States.

Vijay Setia, former president of the All India Rice Exporters Association, told the Indian Express newspaper: “A 20% tariff will not make Indian rice uncompetitive.

He said India currently exports 5% broken white rice for $340 a ton (compared to $380 for Pakistan, $395 for Việt Nam and $430 for Thailand).

India exports rice to more than 150 countries, so any reduction in its shipments would raise food prices, which are already too high due to drought, heat waves and the Russian-Ukrainian conflict.

Ukraine and Russia are also two major suppliers of wheat, whose world prices have increased significantly recently.

In its August report, the United States Department of Agriculture (USDA) lowered its global rice production forecast for the 2022-23 crop to 512.4 million tonnes, down 2.3 million tonnes from compared to its initial forecast and 1.2 million tonnes compared to the previous harvest.

But it has increased projections for global post-harvest consumption by more than two million tonnes.