Vietnam PM agrees to resume rice export in April
Vietnam PM agrees to resume rice export in April
Prime Minister Nguyen Xuan Phuc has requested government agencies to ensure national food security and avoid shortage of rice in any circumstance.
Prime Minister Nguyen Xuan Phuc has agreed to resume rice export with an amount of 400,000 tons in April.
Phuc, however, requested government agencies to ensure national food security and avoid shortage of rice in any circumstance, especially during the time of the Covid-19 pandemic and climate change.
Phuc asked the Ministry of Industry and Trade (MoIT), along with other relevant government agencies, to propose rice export plans for May prior to April 25 while envisioning scenarios for management of domestic rice market and rice export in case the Covid-19 persists for the remaining months of the year.
Meanwhile, the Ministry of Finance is tasked with purchasing sufficient rice amount for national reserves.
The MoIT previously proposed resuming rice export following a temporary halt. The ministry, however, proposed monitoring the activity closely on a monthly basis, a necessary move to ensure food security at the time of crisis.
Under its proposal, the estimated volume for rice export in April and May is 800,000 tons, after having setting aside 300,000 tons in national reserves and 400,000 tons for possible emergencies in the upcoming two months. The volume of rice export in the two-month period would represent a decline of 40% year-on-year.
Vietnam rice exporters to benefit from growing global demand
Data from the Department of Processing and Agricultural Market Development revealed in the first three months of the year, the exported rice quantity increased by 20% year-on-year to 1.67 million tons.
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Meanwhile, the average exported rice price climbed up 5.8% compared to the same period last year, reaching US$463.5 per ton, resulting in rice export turnover of US$774 million, up significantly by 27.8% year-on-year.
The growth of Vietnam rice export mainly stemmed from the decline in Thailand's rice supply and India's interrupted rice export activities.
According to trademap.org, Thai and India’s rice exports in January and February were US$305.9 million and US$262.4 million, down 36% and 30% year-on-year, respectively.
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Under the growing impacts of the Covid-19 epidemic, the Indian government put in place social isolation order, leading to labor shortages and supply chain disruptions that have partially paralyzed Indian agriculture, according to Viet Dragon Securities Company (VDSC).
Consequently, Indian rice traders stopped signing new export contracts as they were unsure of the rice supply. In 2019, India exported only 9.87 million tons of rice, the lowest level in the last eight years as their key partners from Asia and Africa chose other suppliers. As a result, Vietnam benefited from these disruptions, with China among major buyers of Vietnam’s rice, said VDSC.
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In the first two months of 2020, China had the largest increase in Vietnam's rice exports with 595% year-on-year, reaching 66,222 tons. Besides, the Philippines and Malaysia are two important partners of Vietnam's food industry as they imported 357,055 tons and 94.413 tons in the two-month period, up 16% and 149%, respectively.
Currently, the Philippines accounted for the highest proportion of Vietnam's total exports with 38.4% while Malaysia made up over 10.2%.
VDSC expected many countries are under pressure to increase their reserves due to the complicated development of the Covid-19 epidemic.
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Therefore, global demand for rice will still remain high and rice supply is forecast to be lower than before. VDSC predicted, in the second quarter, Vietnam's rice exporters will continue to benefit as prices should stay at a high level.
