Normal story for the past 20 years
For many consecutive days, the media has been reporting on the event of Vietnam importing rice with a record amount of nearly 1 billion USD. The media coverage, but lacking analysis and explanation, has raised concerns among some people when Vietnam, a rice exporting powerhouse, has to import rice with a record value. However, according to experts, Vietnam's rice import is not a new thing and "there is nothing to make a fuss about".
As someone who has devoted a lot of effort to researching the rice market, Master Nguyen Phuoc Tuyen - former Director of the Agricultural Extension Center of Dong Thap province - said that Vietnam has been importing rice for the past 20 years. On average, each year, it imports over 2 million tons of rice from Cambodia, India, Thailand... Of which, there are also over 2 million tons of rice imported from Cambodia.
According to Mr. Tuyen, data from the Cambodian Ministry of Agriculture, Forestry and Fisheries shows that in 2023, Vietnam imported 4.387 million tons of rice and in the first 7 months of 2024, it continued to import 2.7 million tons of rice from Cambodia, estimated to be worth 784.60 million USD... This shows that the import of rice in large quantities is not the first time and is so sudden that it causes panic.
Data from the Directorate of Customs also shows that over the past 5 years, Vietnam's rice import turnover has always increased. If in 2019, this figure was 465 million USD, then by 2021 it increased to 718 million USD and by 2023, this figure was 830 million USD. Especially in the first 9 months of 2024, rice imports reached 996 million USD.
Double benefit
Master Tuyen said that statistics from the US Department of Agriculture show that in 2024, Vietnam's rice output will reach 27 million tons. Of which, about 8 million tons will be exported, so it is necessary to import 2.4 million tons of rice to serve domestic food and processing needs in a reasonable manner, both in terms of actual demand and price. Of which, the import of Thai rice worth over 5 million USD, mainly Jasmine (mid-season rice) and glutinous rice, mainly serves the high-income consumer segment. Meanwhile, the import of broken rice from India is mainly rice with high Amylose (starch) content (30%). This type of rice is very hard, not favored by Vietnamese consumers, but is very suitable for processing flour and animal feed...
This is considered an ideal replacement when the area for growing similar rice varieties in Vietnam, most typically IR504 (starch content of about 27%) is gradually decreasing due to the widespread coverage of high-quality, sticky rice... This replacement is highly economically effective because this type of broken rice costs only about 400 USD/ton while Vietnamese rice is exported at a fairly high price. On average, from the beginning of the year until now, the price of rice is at 624 USD/ton, an increase of 13.1% over the same period last year. Therefore, according to experts, importing rice brings double benefits. Meanwhile, according to domestic exporters, this does not greatly affect export activities. Because most of the contracts in 2024 have been completed.
If India continues to sell large quantities of rice at clearance prices due to the backlog from the export restriction order, it will somewhat affect the price of rice in the international market, including Vietnam's winter-spring rice crop. Many international and domestic forecasts show that the price of Vietnamese and Thai rice will fall below 600 USD/ton in the near future. However, according to Master Tuyen, if we know how to calculate, Vietnam can completely take advantage of and turn this risk into an opportunity.
Accordingly, in the context of many rice-growing countries being affected by storms and rains, which will reduce rice production, especially high-quality rice, we will increase the area of high-quality rice for export at high prices, contributing to "consolidating" farmers' income in the face of India's wave of warehouse clearance. At the same time, we will take advantage of the opportunity to import broken rice at low prices to support animal feed processing plants and rice flour production facilities to receive cheap raw materials. This will bring double benefits to the country: both supporting businesses to "do well" to overcome the negative effects of the global economic crisis, and contributing to ensuring and strengthening national food security.
