Home Enterprise The Rice Industry in 2024: Exporting “Liquid Gold”, Profiting “Grains of Sand”

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The Rice Industry in 2024: Exporting “Liquid Gold”, Profiting “Grains of Sand”

27 February, 2025

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Rice Exports Shine

According to data from the General Department of Vietnam Customs, Vietnam exported 9.03 million tons of rice in 2024, valued at 5.67 billion USD, an increase of 11.1% and 21.2%, respectively, compared to 2023. These are record-breaking figures for the Vietnamese rice industry, and 2024 also marks the fifth consecutive year of positive growth in rice export turnover.

Vietnamese rice is mainly exported to ASEAN countries, accounting for 71% of total exports, equivalent to over 6.4 million tons, an increase of 31% compared to the previous year. The Philippines was the largest market, with over 4.2 million tons, a rise of 34.7%.

Image: ABS Research

The average export price of rice in 2024 also reached a record high of 627 USD/ton, an increase of 9.1% compared to the previous year. In the first nine months, domestic rice prices remained high but dropped sharply in the fourth quarter of 2024 due to subdued demand from the main consuming markets and the impact of India’s lifting of rice export restrictions.

The “Flip Side” of Export Records

Despite the record-breaking exports, the business performance of enterprises in the industry did not meet expectations. According to data from VietstockFinance, the total revenue of nine rice companies listed on the HOSE, HNX, and UPCoM exchanges reached 40,400 billion VND, a 5% decrease compared to the previous year. Net profit declined more steeply, by over half, to only 80 billion VND. The average gross profit margin decreased slightly by 0.1 percentage points, to 8.6%.

In reality, the rice market has low-profit margins and high risks. Therefore, businesses often face pressure from high borrowing costs, procurement pressures from farmers, and high input costs for paddy.

Overall, the business landscape of Vietnamese rice companies in 2024 presents a diverse range of colors, reflecting the challenges and difficulties faced by the industry.

“Rain” of Reduced Profits in the Rice Industry

Vinaseed (NSC) maintained a high gross profit margin (29.7%) but still experienced a 1.5 percentage point decline compared to the previous period, resulting in a slight 3% decrease in net profit, falling to nearly 218 billion VND – the lowest in four years. Meanwhile, revenue in 2024 reached a new peak of 2,449 billion VND, a 20% increase compared to 2023.

Vinaseed’s Business Results for the Past Five Years

Similarly, Southern Seed (SSC) also witnessed a 4.1 percentage point contraction in gross profit margin, falling to 28.7%, causing net profit to plunge by 22% compared to 2023, reaching only 42.5 billion VND. This is also the lowest in four years, despite a 29% increase in revenue to 388 billion VND.

SSC attributed the decline in profits to the absence of income from fixed asset disposals and profits received from associated companies, unlike the previous year.

Vinafood II (VSF) managed to escape losses but experienced the most significant profit reduction in the industry. Net profit in 2024 stood at only 4.2 billion VND, a steep 82% drop compared to the previous year. In the fourth quarter alone, VSF’s net profit plummeted by 92%, to just 1.5 billion VND, mainly due to fluctuations in the export rice market and USD exchange rates in the final months of the year.

VSF’s revenue in 2024 reached 21,460 billion VND, the highest in the industry, equivalent to an average daily revenue of nearly 59 billion VND. However, the gross profit margin slipped to 7.6%, a 0.3 percentage point decline compared to the same period last year.

After privatization in 2018, VSF encountered numerous challenges due to the misdeeds of its former leadership and consecutive years of losses. The company only turned a profit in 2023, with 23 billion VND, ending a decade-long streak of losses (2013-2022). Nonetheless, as of the end of 2024, VSF still bore accumulated losses of 2,789 billion VND.

Vinafood II Reaps Sweet Fruits after Over a Decade of Consecutive Losses

At the 2024 Annual Conference, VSF’s management recalled the challenging period before 2022. From operating in a state of loss, with unhealthy finances and losing the trust of partners, the company has now regained its leading position in the rice industry and rebuilt its reputation.

Kigimex (KGM) also faced difficulties, reporting the lowest net profit in five years at 5.2 billion VND, a 58% decrease compared to the previous year. Although revenue hit a new record of 7,403 billion VND (a 2% increase), the financial results were impacted by a fourth-quarter loss of 5.3 billion VND due to a subdued export market and declining byproduct prices.

While most rice companies reported reduced profits, Afiex (AFX) and Kien Giang Trading (KTC) stood out as rare bright spots. AFX’s net profit reached nearly 28 billion VND, a 5% increase compared to the previous year, thanks to other income of over 2.8 billion VND in the final quarter. Meanwhile, KTC recorded a net profit of nearly 26 billion VND, a slight 1% increase, and the highest in four years.

KTC Achieves Highest Net Profit in Four Years

The “Ghost” of Losses

Foodcosa (FCS) experienced a sudden loss of 1.5 billion VND in 2024 after two consecutive profitable years in 2022 and 2023. This loss was mainly due to provisions for inventory devaluation, causing accumulated losses to increase to over 194 billion VND.

FCS stated that its financial situation remains challenging, with negative working capital, a lack of support from any organization, and the burden of significant depreciation, fixed costs, and labor expenses. The company is committed to reducing losses and improving business performance in 2025 through various solutions, including boosting rice and fuel sales, enhancing services, and cutting costs.

Foodcosa Reports First Loss Since Consecutive Years of Unprofitable Operations from 2016-2021

Angimex (AGM), a long-standing rice company in An Giang, continues to sink into crisis after the troubles of the Louis Holdings group in 2022. In 2024, AGM suffered a record loss of 251 billion VND, marking the third consecutive year of losses. The fourth quarter of 2024 was the most devastating, with AGM losing 140 billion VND.

The primary reasons for this were operating at a loss, high operating expenses in the tens of billions of VND, and losses from joint ventures and associates. As of the end of 2024, AGM’s accumulated losses exceeded 417 billion VND, with negative equity of over 235 billion VND.

Angimex Reports Record Loss in 2024, the Third Consecutive Year of Losses

This situation puts AGM shares at risk of mandatory delisting from HOSE, according to Official Letter No. 73 dated February 23, 2025, if the audited consolidated financial statements for 2024 continue to show losses or negative equity.

The financial losses have also led to AGM’s repeated delays in repaying interest and principal on the AGMH2123001 and AGMH2223001 bonds. The company is in the process of liquidating assets to improve cash flow, most recently planning to sell 55% of its capital contribution in Angimex Food JSC to reduce pressure on debt exceeding 347 billion VND at BIDV’s Bac An Giang branch, despite multiple debt restructuring efforts in the past two years.

The Fall of Giants

Two “giants” of the rice industry – Trung An (TAR) and Loc Troi (LTG) – have yet to publish their Q4/2024 financial statements, indicating an uncertain future following a series of events.

TAR is mired in a financial crisis. After a decline in profits in 2022, the company reported a net loss of 16 billion VND in 2023 and continued to lose 31 billion VND in the first nine months of 2024, mainly due to increased production costs and borrowing expenses. Previously, the auditor refused to express an opinion on the 2023 and 2024 semi-annual financial statements, leading to TAR’s delisting from HNX and restricted trading on UPCoM.

Similarly, LTG has also repeatedly requested extensions for publishing its financial statements, citing “force majeure” reasons. This delay in submitting financial reports has resulted in restricted trading of LTG shares on UPCoM.

The company has also faced governance issues, with allegations of fraud and asset misappropriation against its former CEO, Nguyen Duy Thuan, and a series of high-level personnel changes. LTG’s plan to hold an extraordinary general meeting of shareholders on December 20, 2024, was postponed due to a lack of applications for the Supervisory Board.

According to Q1/2024 financial statements, LTG recorded increased revenue but decreased gross profit and a net loss of 96 billion VND. In 2023, LTG’s net profit after the audit also plummeted by 96% compared to 2022, to less than 17 billion VND.

LTG was one of the stocks with the sharpest price declines in 2024. Image: VietstockFinance

Vietnamese Rice in 2025: What “Stormy Waves” Lie Ahead?

The Vietnam Food Association (VFA) forecasts that rice exports in 2025 will face challenges and may decrease to 7.5 million tons, reflecting a shift in the supply-demand balance.

The latest forecast by the United States Department of Agriculture (USDA) indicates that global rice supply for the 2024-2025 crop year will reach a record high of 527.6 million tons. Rice prices are expected to continue declining in the first half of 2025 before stabilizing towards the end of the year, posing significant challenges for exporting countries, including Vietnam.

In reality, Vietnamese rice export prices have continuously dropped since the beginning of 2025, reaching their lowest level since September 2022. As of February 17, Vietnamese rice export prices remained below 400 USD/ton – the lowest among the top four exporting countries: India, Thailand, Vietnam, and Pakistan.

Several factors have contributed to the sharp decline in Vietnamese rice prices. Experts point to a common issue: India’s relaxation of export restrictions, reduced import demand from major markets such as the Philippines and Indonesia, and the Philippines’ strict import controls to support domestic production, leading to a significant drop in orders from this market.

The decreasing rice prices are even more concerning as Vietnam enters the winter-spring harvest season with abundant yields, while demand from importing countries remains weak, causing anxiety among many businesses about the potential for further price drops.

The World