Eight months into 2023, rice exports surged to an all-time high at nearly six million tons, a 20% increase compared to last year, reaching 89% of the target this year.
This number is taken from the latest data of customs, bringing the total rice export turnover in the period to almost $3.2 billion, a 34% increase in value.
The Philippines, China, Indonesia and Ghana imported the most Vietnamese rice with a growth rate from 3% to nearly 1,500% over the same period last year.
A farmer harvests rice in Dong Anh, Hanoi.
Vietnam's rice exports are expected to receive a significant boost in the remainder of the year with a surge in orders from new markets. However, there is concern among export enterprises that domestic supply might not be enough to meet the demand.
Speaking to VnExpress, a CEO of one enterprise in the Mekong Delta said that the rice supply in the Vietnamese market will remain relatively stable in the fourth quarter, while the demand in many countries has increased significantly.
Last year, Vietnam exported 7.2 million tons of rice, including additional imports of 500,000-700,000 tons from India and 300,000 tons from Cambodia. This year, imports from these countries have been reduced due to India's rice export ban. Despite normal weather conditions during the autumn-winter crop, the rice yield is only on par with 2022.
"With demand exceeding supply, it is highly unlikely for exports to exceed expectations and reach the goal of 7.5-8 million tons," the CEO said.
Nguyen Viet Anh, General Director of Orient Rice Co. Ltd., is worried about the export balance this year.
He cited data from the U.S. Department of Agriculture, which indicated that Vietnam's inventory-to-consumption ratio was only 11%, while the recommended level is 22%. This ratio has fallen further to just 8.5% after India's ban on rice exports.
"Enterprises are grappling with the problem of farmers overselling their produce. The number of brokers in the market is rapidly increasing, causing disruptions and financial losses for many enterprises," said Anh.
Not only did they lose their deposit, but they were unable to purchase rice from previously affiliated farmers, he added.
In a recent report sent to the prime minister, the Vietnam Food Association highlighted the rapid rise in rice prices, which has broken the supply chain from farmers to traders, processing mills and export enterprises. These challenges have made it difficult for export companies to source goods and fulfill their contractual obligations.
While export rice prices have declined over the past few days, domestic rice prices are still on the rise. Currently, domestic rice prices stand 5-7% higher than export prices, equivalent to $660-680 per ton for 5% broken rice.