Opportunities to increase rice exports during global inflation

According to the General Department of Customs, Vietnamese rice exports in May reached the highest level within a year at 710 thousand tons, equivalent to 347 million USD. This is a sharp increase of 27.8% in volume and 25.8% in value compared to April; an increase of 13.5% in volume and 2.5% in value compared to May 2021.

Thanks to strong growth in May, rice exports in the first 5 months of this year have reached nearly 2.8 million tons, with a export turnover of over 1.3 billion USD. This is an increase of 6.9% in volume and a decrease of 3.7% in turnover over the same period in 2021.

Rice exports continued to grow exceptionally in June. From June 1st to the 15th, rice exports have reached 346,231 tons, equivalent to 171 million USD, up by 90.59% in volume and by 66.59% in value compared to the first half of May 2021. Accumulated rice exports by June 15 have reached 3.1 million tons, which is worth more than 1.5 billion USD, an increase of 12.3% in volume and 1.01% in value over the same period in 2021.

According to several experts in the food sector, food (including rice) is an essential commodity group, not only to Vietnam but also globally. Therefore, when high inflation level in Europe, the US spreads to many countries around the world, the prolonged conflict between Russia and Ukraine remains, the Covid-19 epidemic develops complicatedly across the globe, etc.,  global rice consumption has not decreased but is more likely to increase as a result.

Evidently, customers from many African countries are currently very interested in Vietnamese rice because they lack an important food supply from Eastern Europe due to the Russia - Ukraine conflict.

The Department of Finance in Philippine reported that, for the first 5 months of the year, this country has imported 1.26 million tons of rice, an increase of 43.3% over the same period in 2021. According to the China General Department of Customs, Chinese rice imports in the first four months of 2022 hit a record high at 2.3 million tons, equivalent to 957.7 million USD, up by 17.7% in volume and by 5.5% in value over the same period last year.

Notably, in the total China's record rice imports in the first four months of this year, cheap rice accounts for a large proportion. China has reportedly promoted the import of this type of rice to use it as animal feed in the context that the prices of many feed materials such as corn, wheat, among others have skyrocketed too high and supply is tight due to the Russia - Ukraine conflict.

Some rice traders in Vietnam shared that the use of broken and low-grade rice products as animal feed is also increasing.

In addition to the increased demand for use as food for humans, the use of low-grade rice as animal feed in many countries will also increase the global demand for rice.

The Ministry of Industry and Trade forecasts that, with increasing demand for rice from different markets, Vietnamese rice exports will continue to develop significantly towards the end of the year, especially rice exports to the Philippines and China. This growth can be attributed to China's reduced level of rice production due to the impacts of floods and the rapidly falling Philippines' rice stocks and demand for additional rice imports.

Due to the sharp fluctuations in global rice demand, the Ministry of Industry and Trade said that Vietnamese rice exports for this year can reach over 6.4 million tons, which is 200,000 to 300,000 tons higher than compared to 2021.

Subsequently, the production of winter-spring and summer-autumn rice crop in the Mekong Delta thas been active and very stable this year. The remaining rice crops for the year is also forecast to be positive. The Mekong Delta can profit from nearly 6.6 million tons of rice for export this year.

High-quality rice (specialty rice, fragrant rice, sticky rice, high-quality rice) is estimated to account for over 90% of the total rice production in the Mekong Delta this year. Therefore, a question must be raised that: although rice exports increased sharply in volume for the first 6 months of the year, why did the export turnover increase only very marginally, at approximately 1%?

According to multiple information sources, high inflation levels, the Russia - Ukraine conflict and so on, are increasing demand, increasing food prices globally, but did demand and export price of rice really increase? If they do increase, then by how much? These are the questions that need to be clarified so that farmers do not rush to produce rice, which can lead to excess rice production. (Mr. Le Thanh Tung, Deputy Director of the Department of Crop Production).