Vietnam’s rice export market is witnessing unprecedented growth, as the country’s export prices soar to new heights. At the end of last week, the export price of Vietnam’s five-per cent broken rice reached an impressive $513 per tonne, representing a sharp increase from the first week of July. The nation’s average rice export price last year stood at $650 per tonne, showing a remarkable 20.8 per cent surge over the same period last year. This article explores the reasons behind this surge, the impact of global demand, and the role Vietnam plays in the rapidly evolving rice export landscape.
Record High Prices and Export Growth
Vietnam’s rice export sector has experienced remarkable growth in the first half of the year. Data from Vietnam’s General Department of Customs show that the nation sold more than 4.2 million tonnes of rice worth $2.26 billion. This volume represents a significant increase of 21 per cent, with a 32 per cent rise in value compared to the same period in the previous year. The average export price of rice for the past six months reached $539 per tonne, marking a remarkable 10 per cent increase compared to the same period in the preceding year. Furthermore, in June, the average export price surged to $650 per tonne, a substantial 20.8 per cent jump compared to the same period last year.
Increased Global Demand
The primary driver behind Vietnam’s soaring rice export prices is the escalating global demand for the commodity. As nations grapple with concerns over food security, many countries are actively securing their rice supply. The El Nino phenomenon’s anticipated negative impact on global agriculture has further heightened the urgency for countries to stock up on rice, leading to a surge in rice purchasing worldwide.
Diversifying Export Markets
Vietnam has strategically expanded its export reach by diversifying its markets. Traditional rice markets like the Philippines and China have witnessed double-digit growth in Vietnam’s rice exports during the first five months of this year. Surprisingly, rice exports to new markets such as Indonesia, Chile, Turkey, and Senegal have seen a meteoric rise, recording increases ranging from 1,100 per cent to a staggering 16,000 per cent compared to the same period last year. This impressive growth in emerging markets has significantly contributed to Vietnam’s record-high rice export figures.
Global Impact of India’s Rice Export Policy
An important development impacting global rice prices is India’s potential ban on the export of all non-Basmati rice. India currently holds a substantial 40 per cent share of total global rice exports. If this proposed export ban is implemented, it could lead to a significant increase in world rice prices, creating favorable conditions for other exporting countries like Vietnam and Thailand to gain a larger market share.
Vietnam’s rice export industry is experiencing an extraordinary surge in both prices and volume. The country’s strategic efforts to diversify export markets, combined with the growing global demand for rice, have contributed to its remarkable performance in the first half of this year. With prices reaching new record levels and emerging markets showing exponential growth, Vietnam’s role as a key player in the global rice export landscape is becoming increasingly significant. As the market closely monitors India’s export policy, the potential implications could further shape the dynamics of the rice trade in the coming months.