The trade and industry ministry advised the Vietnam Food Association and rice exporters to increase purchases of rice in the domestic market, maintain a minimum reserve for circulation, and ensure a balance between exports and domestic consumption to stabilise prices. — Reuters
HANOI: The Trade and Industry Ministry’s Import-Export Department urges rice exporters to ensure price stabilisation and food security in the domestic market after India restricted rice exports, which is forecast to have a significant impact on the global rice market.
The ministry advised the Vietnam Food Association and rice exporters to increase purchases of rice in the domestic market, maintain a minimum reserve for circulation, and ensure a balance between exports and domestic consumption to stabilise prices.
A close watch must be placed on the domestic and global rice markets to find solutions to cope with problems that might arise from the supply and circulation of rice in the domestic and international markets.
The ministry’s warning came after India’s announcement that it would prohibit the exports of non-basmati white rice, effective July 20, except in certain cases, such as shipments that had already been loaded before the announcement or those approved by the Indian government for the purpose of meeting the food security needs of certain countries.
The Vietnam Trade Office in India also issued a warning to Vietnamese rice importers who were importing rice from India to check the status of their deliveries.
According to data from the Indian Industry and Trade Ministry, Vietnam imported a record amount of rice from India in May 2023 with a volume of nearly 101,000 tonnes, an increase of 56.64% compared to May 2022, ranking Vietnam fourth among countries that import rice from India in terms of volume.
In the January to May period, Vietnam imported 367,500 tonnes of rice from India, an increase of 31.76% over the same period last year. Vietnam ranked eighth among countries importing rice from India during the period.
The ban, which accounts for more than 40% of world rice exports, aims to curb domestic inflation after retail rice prices climbed 3% in a month.
That was because of late but heavy monsoon rains causing damage to crops.
Market insiders said that the ban raised fears of further increases in global food prices but was providing significant opportunities for Vietnam, which was also among the top three rice exporters in the world, together with India and Thailand.
Statistics from the General Department of Customs showed that Vietnam’s rice exports were more than 4.2 million tonnes in the first half of this year, worth US$2.3bil (RM10.5bil), an increase of 21% against the same period last year in terms of volume and 32% in terms of value.
Given the current market situation, Vietnam’s rice export goal of 7.2 million tonnes worth more than US$4bil (RM18bil) this year was within reach of setting a record for the country’s rice exports.
Vo Tong Xuan, an expert in agriculture, said that there was a huge opportunity for Vietnam to promote rice exports in the second half of this year.
The average rice price increased by 11% to US$539 (RM2,460) per tonne in the first half of this year and might reach US$600 to US$700 (RM2,738 to RM3,195).
Do Ha Nam, deputy chairman of the Vietnam Food Association, said that rice prices would continue to increase.
Although Vietnam is one of the top three rice exporters in the world, the country must import around one million tonnes of rice on average per year from India for processing.
India’s ban will cause a strain in supply in the Vietnam market, which will push up prices, Nam said.
He added that many types of fragrant rice saw an increase of more than 8,000 dong (RM1.54) per kg recently.
Still, ensuring food security and domestic consumption demand remained the top priorities, Nguyen Nhu Cuong, director of the Plantation Department under the Agriculture and Rural Development Ministry, was quoted by Tuoi Tre (Youth) newspaper as saying.
Currently, world rice prices are fluctuating around their highest level in the past decade.
Cuong said there would not be sudden increases in rice prices in the domestic market as supply remained normal.
He stressed that the government and relevant ministries will take timely measures to ensure food security while not losing export opportunities.
He cited statistics showing that more than 17 million tonnes of rice were harvested as of May, 0.7% higher than the same period last year.
Vietnam expects to harvest 43 million tonnes of rice this year, enough to meet the demand for food, husbandry, processing and reserve, as well as exports of around 6.5 to 6.6 million tonnes.
Cuong said that rice exporters should also take into account the scenario in which rice prices increase to more than US$1,000 (RM4,564) per tonne, as happened in 2008, and have in place an appropriate business plan.
He added that companies should be cautious when negotiating and signing contracts when they do not have rice in reserve. — Viet Nam News/ANN
