It is estimated that Vietnam’s rice export turnover reached US$2.3bil (RM11bil), an increase of 34.7% year-on-year. — VNA/VNS
HANOI: Rising demand for rice and higher prices are benefiting the country’s export as well as export enterprises in the industry. This makes stocks of rice exporters appealing investments.
In the first half of 2023, Vietnam posted a trade surplus of more than US$12.26bil (RM57bil).
A significant contribution came from the agricultural sector, especially rice, according to the General Department of Vietnam Customs.
It is estimated that the country’s rice export turnover reached US$2.3bil (RM11bil), an increase of 34.7% year-on-year.
Rice ranks third in export value in the group of agricultural products.
Rice exports are estimated to climb 22.2% over last year to 4.27 million tonnes.
The positive performance was thanks to high demand in the global markets, especially from traditional importers such as the Philippines, China and Indonesia.
Moreover, rice production in India and Thailand is low as the effects of El Nino caused a reduction in yields.
As a result, the abundant supply from the winter-spring season and high yield has met the market’s demand.
Notably, Vietnamese rice prices are higher than that of Thailand and India.
In June, the country’s 5% broken rice was quoted at about US$498 (RM2,299) per tonne, while that of Thailand and India were US$492 (RM2,272) and US$453 (RM2,092) a tonne, respectively.
Vietnam’s 25% broken rice prices were US$478 (RM2,207), about US$10 (RM46) higher than Thailand’s rice and about US$50 (RM231) higher than India’s rice.
The bullish trend continued in early July.
Last week, Vietnamese 5% broken rice was offered at US$500 to US$510 (RM2,309 to RM2,355) per tonne, according to statistics from Reuters.
While many rice exporters have continuously received large orders, inventories of the winter-spring crop have depleted and traders are currently waiting for supplies from the summer-autumn crop.The recent report from the US Department of Agriculture expects that Vietnam will continue to be the world’s largest rice exporter this year, with a volume of 7.2 million tonnes, up from 7.05 million tonnes in 2022.
Rice enterprises have seen an improvement in profit margins on higher selling prices and declining input costs of fertilisers.
The global fertiliser supplies increased as European countries opened their doors to Russian fertiliser exporters while China eased fertiliser export quotas.
The World Bank forecasts that urea prices will decrease by 10% in 2023 and fall further by 8% in 2024.
Despite the bright developments in the first quarter, profits of rice enterprises declined over the last year due to high interest expenses.
However, business results in the second quarter of 2023 are expected to be positive thanks to higher orders and selling prices, while banks have lowered interest rates.
Most rice exporters see growth for their businesses this year. — Viet Nam News/ANN
