New expectations for Vietnamese rice

According to the Thai Rice Exporters Association, in the early days of 2021, the price of 5% broken rice exports of Thailand and Vietnam continued to be over US$ 500/ton, specifically at US$ 529/ton and US$ 508-512/ton respectively.

Thus, the rice export price of Vietnam has continued to stand at a high level, around US$ 500/ton, for a quite long time. This is primarily because the supply of commodity rice in Vietnam is currently limited.

At present, the 2020/2021 winter-spring rice in the Mekong Delta has begun to harvest, but the harvested area is only about 50,000 hectares, and the average yield is estimated at 7 tons/ha. The amount of harvested rice is about 350 thousand tons.

In January and February 2021, the harvested winter-spring crop area will be 180,000 hectares, equivalent to about 1.26 million tons of rice. Until March, the winter-spring crop in the Mekong Delta with the harvest area of ​​approximately 600,000 hectares won’t start to harvest.

Meanwhile, traders in the Philippines, Africa and many other countries have been sending inquiries to buy Vietnamese rice.

The great typhoons at the end of 2020 have significantly affected rice production in the Philippines. According to the report in November 2020 of the US Department of Agriculture, the Philippine rice production in the 2020/2021 crop year was only about 11.7 million tons, down more than 200,000 tons compared to the previous crop year. Meanwhile, the country's demand for rice is estimated to increase by 100 thousand tons to 14.4 million tons. Rice production in the Philippines in 2021 may lack up to 2.7 million tons compared with demand.

Therefore, in 2021, the country will continue to import rice in large quantities. Mr. Ariel Cayanan, Deputy Minister of Agriculture of the Philippines, has just said that the country has expected to import at least 1.69 million tons of rice in 2021 to ensure enough rice for its people.

Also according to the US Department of Agriculture's forecast, the total volume of rice imported worldwide in the crop year 2020/2021 will be about 44,263 million tons, an increase of nearly 600 thousand tons compared to the 2019/2020 crop. Thus, the demand for imported rice is still on the rise globally. This is understandable because in the complicated context of the Covid-19 pandemic, many countries tend to increase their storage of essential foods.

In addition, Vietnam's rice quality has been significantly improved in recent years thanks to a change in production structure towards reducing the area of ​​low-grade rice, increasing the area of ​​high-quality rice, fragrant rice and specialty rice, which will continue to keep export rice at high prices in the coming months.

On the other hand, the opportunity to boost rice exports from the recently signed Free Trade Agreements will also have a positive impact on rice exports in 2021. From August to the end of December of 2020, Vietnamese enterprises made good use of the quota on rice export to the EU under the EVFTA Agreement by selling fragrant rice at high prices.

This has significantly contributed to the increase in the value of Vietnam's rice exports in the past year and will surely continue to be promoted in this year 2021 if businesses make the most of the tariff quota of 80 thousand tons of rice exported to the EU, including 30 thousand tons of fragrant rice.

Some rice businessmen said that Vietnam's rice export will continue to rise in the first months of 2021, even throughout the year. As for the export rice price, it is likely that Vietnam’s 5% broken rice will maintain at a high price of around US$ 500/ton at least until the end of the 2020/2021 winter-spring crop.