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This move clearly shows that rice supplies in Asia are in short supply, causing prices to rise further in 2021, possibly even forcing traditional customers in Thailand and Vietnam to change direction. to buy rice from India, the world’s largest rice exporter.
“We are exporting to Vietnam for the first time,” Krishna Rao, chairman of the Association of Rice Exporters, told a Reuters BV reporter yesterday (Jan 4), adding: “India’s prices are very high. The big difference price is making export (Indian rice) possible. “
Declining supply and continued purchasing from the Philippines pushed Vietnamese rice export prices to the highest level in 9 years. As a result, the price of 5% broken rice last week was offered at $ 500-505 / t, significantly higher than the $ 381-387 / t of the same rate from India.
Reduced supply will increase concerns about food insecurity in sub-Saharan Africa, where import demand is increasing, in part due to population growth.
According to the World Bank (WB), the constant shortage of food for a long time is getting worse due to the Covid-19 epidemic, which seriously affects the lives of many families in many countries. The World Bank said that the Covid-19 epidemic had severely reduced people’s incomes and, at the same time, disrupted the commodity supply chain.
The pandemic has seen people in countries that use rice many times to increase their food reserves.
In 2020, Vietnam announced that it would reserve 270,000 tons of rice to ensure a sufficient food supply in the context of the global supply disruption of Covid-19.
The government of India has a huge reserve of rice, which has accumulated since the 2016/17 crop season, which is cheap but of low quality.
Reuters quoted a trader in Ho Chi Minh City as saying: “The quality of the rice is too low to be used as food directly for people, but it can only be used to produce feed and beer.”
Vietnam’s total rice production in 2020 will decline by 1.85% to 42.69 million tons (equivalent to about 21.35 million tons of rice), according to preliminary data from the General Statistics Office. Rice exports in 2020 are estimated to decline by 3.5% to 6.15 million tonnes.
Nitin Gupta, vice president of Olam India’s rice business, said that strong demand from Asian and African countries has also increased the price of Indian rice, but so far Indian rice prices remain much cheaper. with other competitors due to the abundant supply. Mr. Gupta said that Vietnam could buy more once there is a big difference between the rice prices of the two countries.
In December 2020, the world’s largest rice importer, China, began buying Indian rice for the first time in at least three decades due to tight supplies from Thailand, Myanmar and Vietnam and the price of rice. India is much cheaper than other providers.
According to preliminary data from the Indian Ministry of Commerce, in 2020, the country exported a record 14 million tons of rice.
Reference: Reuters
