Favorable conditions for Vietnamese rice businesses – right time, right place

In 2023, the rice industry of Vietnam is expected to benefit from the sustained high price of rice due to the increasing demand, and the profit margin of rice businesses is also expected to expand due to the cooling of input costs. According to experts from the Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCBS),

the Vietnamese rice industry has favorable natural and geographical conditions. Favorable weather conditions give Vietnam a competitive edge over its competitors, while prolonged drought in China has reduced its 2021-2022 harvest by 2%. As a result, China plans to import an additional 6 million tons of rice in the 2022-2023 harvest. Meanwhile, the Philippines’ rice inventory is decreasing due to the destruction of its crops by the typhoon Noru, and rising fertilizer costs have forced the country to increase rice imports.

The US Department of Agriculture (USDA) predicts that the Philippines will need to import an additional 2.8 million tons of rice for the 2022-2023 harvest. In India, the drought has caused a 380,000-hectare decrease in rice cultivation, and the expected yield for the Kharif crop (harvested in autumn and early winter) is expected to account for 80% of the country’s production, reaching up to 10-12 million tons for the 2022/2023 harvest.

Therefore, the decrease in supply in India is the main factor in the forecast of global rice shortages next year. In addition to the sustained high price of rice, VCBS experts believe that the input costs of rice production are expected to cool in 2023, as a result of Europe’s initiatives and the world’s increasing supply of fertilizers. Despite the difficult global situation, Vietnamese rice exporters are expected to perform well in the first quarter of 2023, as the market supply is abundant. Vietnamese rice has many advantages in terms of quality and price in the US, EU, and Chinese markets.

Leave a Reply

Your email address will not be published. Required fields are marked *