The US Department of Agriculture (USDA) forecasts that in 2024, the world will be in short of about 7 million tons of rice. This will be an opportunity for exporting countries, including Vietnam. However, to take advantage of this opportunity, Vietnam’s rice industry must ensure the balance of supply and demand for the domestic market and exports.
According to the USDA, the global rice supply is no longer abundant when India – the main supply, accounting for 40% of global production, will decrease by 4 million tons compared to 2023, to 132 million tons. Other markets such as the Philippines, Indonesia, Thailand, and Cambodia are also believed to reduce their production due to the impact of El Nino and climate change.
Global rice production in 2023-2024 will reach nearly 518 million tons, while the total consumption is 525 million tons. Thus, the world will face a shortage of about 7 million tons of rice this year. This creates opportunities for rice-exporting countries, including Vietnam. In 2024, Vietnam can export a volume of rice similar to 2023 while still ensuring food security.
The world lacks about 7 million tons of rice, will Vietnam’s exports set a new record?
Mr. Do Ha Nam, Vice Chairman of the Vietnam Food Association, cautiously assessed that rice exports can be different from time to time, but it is not easy to make a breakthrough like last year. However, the average export price of rice in 2024 is expected to be good, at about 600 USD/ton.
The rice industry in general and exports in particular still have certain difficulties. Mr. Do Ha Nam pointed out that in the Philippine market, for example, customers buy in bulk but the selling price is low. Currently, the export price of rice to the Philippines is only about 600 – 605 USD/ton, while it must be above 610 USD for exporters to make a profit. In addition, the rice inventory now is not large. This is also a challenge for enterprises. On the other hand, it is difficult to create a breakthrough in rice export prices because there is no driving factor.
“Theoretically, India has not reopened rice exports yet, however, this is mainly due to election issues. Currently, India’s inventory is still very large and it is likely that sooner or later it will reopen its exports. When this happens, it is very difficult for the market to push prices up, ” Mr. Do Ha Nam said.
According to Deputy Minister of Industry and Trade Phan Thi Thang, under normal conditions, with the expected output, Vietnam can export about 7.6 million tons of rice this year after domestic consumption.
Traders should link the production, consumption, and construction of raw material areas in addition to reserve for circulation under regulations of competent state agencies.
Besides, traders need to actively coordinate with localities to establish mechanisms for cooperation with establishments and farmers to ensure a stable and quality source of goods following market demand and food safety regulations of importing countries. The relationships among exporters and members of the Vietnam Food Association to avoid unfair competition should also be maintained and enhanced./.