Will Rice Exports Continue to Break Records?

According to the Ministry of Agriculture and Rural Development, rice exports in June are estimated to have reached 650,000 tons, earning $416 million. Cumulatively, in the first six months of the year, Vietnam’s total rice export volume reached 4.68 million tons, equivalent to a turnover of $2.98 billion, up 10.4% in volume and 32% in value compared to the same period in 2023.

Breaking Records

This is a new record for Vietnam’s rice exports. The average export price in the first six months of 2024 is estimated at $636/ton, up 19.5% compared to the same period in 2023 – a positive signal as rice exports have increased in both quantity and selling price.

According to customs statistics, in the first six months, many of Vietnam’s top 10 rice export markets recorded strong growth, including: the Philippines up 12% (reaching over 1.9 million tons); Indonesia up 44% (nearly 709,000 tons); Malaysia up 134% (nearly 458,000 tons); Cuba up 287% (nearly 147,000 tons); and Singapore up 44% (91,000 tons). Some premium markets such as the US also increased by 4% (17,000 tons); Australia by 13% (16,500 tons); and Canada by 2% (7,200 tons). Notably, among the top 30 rice-importing markets of Vietnam, Libya and Ukraine recorded four-digit growth rates, with Libya increasing by 9,513% (over 20,000 tons) and Ukraine by 3,856% (over 10,000 tons).

Notably, many export markets have higher selling prices than the average, such as Brunei at $959/ton, the US at $868/ton, the Netherlands at $857/ton, Ukraine at $847/ton, Iraq at $836/ton, and Turkey at $831/ton…

Ms. Duong Thanh Thao, Deputy Director of Ong Tho Rice Joint Stock Company in Ho Chi Minh City, said that the company is exporting ST25 rice to the US and Australia at prices up to $1,200 – $1,250/ton for 5-kg bags. “In addition to our branded products, we also process rice for partners, and we always choose high-quality ST25 rice to satisfy consumers. Sometimes, customers want to increase their purchase volume, but we cannot meet their demand due to limited supply. We always prioritize maintaining the quality and price of our exported rice. However, in reality, there are still some units exporting ST25 rice at lower prices. Furthermore, in each container of exported ST25 rice, some customers even request to add a small amount of red rice, purple rice, or sticky rice, with prices ranging from $2-3/kg,” Ms. Thao revealed.

The executive director of a rice company in Ho Chi Minh City said that his company mainly exports rice to Singapore and the Middle East. Among their products, ST25 rice is priced at around $1,000/ton, while DT8 and Jasmine rice are in the range of $600 – $700/ton. “Compared to the peak prices in August and September of last year, rice prices have decreased slightly, but the overall price level is still higher than in previous years. In recent months, as sea freight rates have risen, buyers have requested to share the costs, which has helped cool down rice prices a bit,” the representative said.

Uncertainties in the Second Half of the Year

Mr. Nguyen Van Don, Chairman of Viet Hung Company in Tien Giang Province, said that Asia and Africa are the main markets for Vietnamese rice, while Europe and the US account for a very small proportion. Therefore, although the selling price of rice to the US and Europe is high, the volume is low. “The factors that could significantly impact Vietnam’s rice exports from now until the end of the year include when India will lift its rice export ban and how the import policies of the Philippines, the largest rice-buying market (accounting for 45% market share), will change. As a result, there are many uncertainties surrounding Vietnam’s rice exports in the second half of the year,” Mr. Don analyzed.

Another factor is the Chinese market, once Vietnam’s largest rice customer, which is now reducing its rice imports. In the first six months of the year, China imported just over 215,000 tons of rice, down 68% compared to the same period last year, and ranked 5th among Vietnam’s largest rice-importing markets. Notably, China only purchases ST24, ST25, and sticky rice, avoiding common varieties as in previous years. The reason given by the customers is the high price and sufficient reserves in this segment.

Regarding the Philippine rice market, on July 8, the Vietnam Trade Office in the Philippines informed that at the beginning of July, Filipino farmers filed a petition asking the Supreme Court of the Philippines to declare Executive Order 62, which reduces the import tax on agricultural products, including rice, from 35% to 15%, as unconstitutional. This development could affect the implementation of Executive Order 62 and Vietnam’s rice export prospects to the Philippines.

Also on July 8, the Vietnam Trade Office in Indonesia warned that Vietnam’s rice exports to Indonesia may face disadvantages due to a lawsuit filed by a civil organization, People’s Democracy Study (SDR), against the National Logistics Agency – Bulog (the government agency in charge of international rice procurement) and the National Food Agency of Indonesia at the Corruption Eradication Commission (KPU) over corruption allegations related to rice purchases.

The Vietnam Trade Office in Indonesia assessed that this could seriously affect Indonesia’s rice purchases from Vietnam from now until the end of 2024 or until the case is investigated and clarified.

Following this unfortunate incident, the Vietnam Trade Office in Indonesia recommended that Vietnamese rice export enterprises exercise caution in their transactions, speeches, and competition to avoid any negative impact on Vietnam’s rice exports.

According to statistics from the General Department of Customs, Indonesia was the second-largest market for Vietnamese rice exports in the first five months of 2024, accounting for nearly 17% of the total volume and turnover of Vietnam’s rice exports.

Meanwhile, a leader of the Vietnam Food Association (VFA) said that if India lifts its rice export ban, it will do so carefully to prevent a sudden drop in rice prices, which could cause losses for many parties. Moreover, India has been exporting rice through government channels and exporting premium rice (with export taxes) instead of a complete ban, so inventory levels are not a significant concern. This year, Vietnamese rice exports have been more stable, without the sudden price increases that disrupted the supply chain last year. Therefore, overall, rice exports this year are more stable. Furthermore, since Vietnam has increased its rice exports by 10% in the first six months, there is no need to worry about inventory levels or the pressure to consume large volumes of rice in the remaining months of the year.

Preliminary Conclusion of the Pilot Project for the 1 Million Hectare Rice Project

On July 8, at Tien Thuan Cooperative in Can Tho City, the Can Tho City People’s Committee organized a workshop to summarize the pilot model for the “Project for Sustainable Development of 1 Million Hectares of High-Quality and Low-Emission Rice in the Mekong Delta until 2030” (referred to as the 1 Million Hectare Rice Project). Can Tho is the first locality to implement this pilot model, with an area of 50 hectares at Tien Thuan Cooperative, starting on April 5.

Mr. Nguyen Ngoc He, Vice Chairman of the Can Tho City People’s Committee, said that the model met all the criteria of the 1 Million Hectare Rice Project. These include the use of certified seeds at a rate of 60 kg/ha, sown by machine combined with fertilizer incorporation; application of wet and dry water management… The model reduced the amount of rice seeds from 140 kg/ha to 60 kg/ha, decreased the number of fertilizer applications from 3-4 times/crop to 2 times/crop, and minimized the use of inorganic fertilizer by at least 20%.

The rice grown under the project increased net profit by 1.3 – 6.2 million VND/ha, reduced CO2 emissions by 2-6 tons/ha compared to the control plot… “The results of this model are the foundation and basis for the Can Tho agriculture sector to replicate it to all areas participating in the 1 Million Hectare Rice Project as committed,” Mr. He stated.

According to Mr. Le Thanh Tung, Deputy Director of the Plant Protection Department (Ministry of Agriculture and Rural Development), in addition to the criteria of the project, another important factor is the close linkage between input material suppliers, agricultural enterprises, and rice purchasing enterprises, with more practical and responsible linkages and the fulfillment of commitments by all parties.