A rice field in Vi Thuy district in the Mekong Delta province of Hau Giang. Vietnam will benefit from the upward trend in rice prices due to limited supply. (Photo: VNA)According to an expert from Vietnam Securities Company Limited Bank for ForeignTrade (VCBS), the country's rice industry enjoys favourable factors, such asweather and geographical advantage.
The prolonged drought in China has caused a decrease in the country's outputfor the 2021-2022 crop, leading to an anticipated six million tonne increase inrice imports for the 2022-23 crop.
Meanwhile, inventories in the Philippines have declined due to typhoons andhigh fertiliser costs, leading to increased rice imports.
The cultivated area in India has also dropped due to drought, making thedecrease in supply - the main factor for the forecast of the global ricedeficit.
Despite these challenges, the hydrological situation in Vietnam has beenstable, with heavy rain in the past year and a neutral outlook in the firsthalf of this year, leading to sound output.
VCBS appreciates the possibility that Vietnam will benefit from the upwardtrend in rice prices due to limited supply and the shift in demand from Indiathis year.
The rising food demand has pushed the price of Indian rice exports to thehighest level in nearly two years.
A Vietnamese trader also noted that global demand for rice has been increasingdue to concerns about global instability.
The total commodity of rice is expected to reach 4.1 billion tonnes in thefirst six months of this year, with rice exports reaching 390,000 tonnes inJanuary.
The consumption of commodity rice in the remaining five months is expected toreach 3.73 million tonnes, not including the amount of rice imported from Indiaand the amount of rice flowing from Cambodia to Vietnam.
VCBS also reported that European countries had eased sanctions and opened theirdoors to Russian fertiliser exporters, while China has loosened its fertiliserexport quota from June last year.
This development is forecasted to decrease input costs for rice production,contributing to an improvement in the profit margin of enterprises.
Although exports grew last year, the cost of rice production also increasedsharply, "eroding" the profits of many businesses.
The Vietnamese Food Association (VFA) reported that the cost of rice productionrose sharply last year, pushing up the purchase price of rice and commodityrice and putting pressure on rice exporters.
Despite the challenges faced last year, analysts expect Vietnameserice exporters to be more favourable this year as rice prices remain high andmany production costs and rice exports gradually decrease, increasing theprofit margin of enterprises in the rice industry./.
VNA
