In W36 in the rice landscape, the Vietnam Food Association (VFA) revealed that Vietnamese rice export prices experienced a significant drop of USD 15 per metric ton (mt) from September 5 to September 7. Vietnam’s 5% broken rice fell to USD 628/mt, and 25% broken rice declined to USD 613/mt. These reductions represent the most substantial decrease since India's rice export ban.
Thailand's 5% rice also dipped by USD 15/mt to USD 618/mt, while 25% broken rice decreased by USD 12/mt to USD 563/mt from September 5 to September 7. Experts attribute these declines to the Philippines setting a price ceiling on August 31, fixing regular-milled rice at approximately USD 720/mt and well-milled rice at around USD 790/mt. This prompted numerous importers to delay or cancel contracts.
Vietnam's rice exports surged to nearly 6 million metric tons (mmt), valued at USD 3.2 billion in the first eight months of 2023, the highest shipment volume on record. This is a remarkable 20% year-on-year (YoY) increase in volume and a significant 34% YoY growth in value, achieving 89% of the annual export target. Vietnam’s rice shipments were primarily bound for the Philippines, China, Indonesia, and Ghana, with growth rates ranging from 3% to a significant 1,500% compared to the same period in 2022. Despite these positive shipment trends, concerns are rising among export businesses as they anticipate potential supply shortages amid soaring global demand.
Experts indicate that the rice supply in the Vietnamese market remains relatively stable for Q4-23, even as global demand has significantly surged. This situation is exacerbated by decreased imports from India, due to their export ban, and Cambodia. While the weather for the autumn-winter rice crop is normal, yields are expected to be on par with 2022. These factors make it challenging for Vietnam to meet export targets, ranging from 7.5 mmt to 8 mmt. Experts also express concern about the influx of brokers in the market causing disruptions and losses for businesses. Rice inventory levels are also low, further complicating the export situation.
Lastly, Argentina's rice production reached 1.12 mmt in the 2022/23 season, plummeting 21% YoY to a 13-year low. This reduction was primarily due to a prolonged drought that affected Argentina for three consecutive years, attributed to La Niña. The drought severely hindered irrigation efforts and caused a 9% loss in the planted area. Water resources, including dams and irrigation sources in Corrientes, were depleted, further affecting rice production.
Extreme temperatures during the growing season, along with an abrupt temperature drop in Feb-23, impacted yields. The 2022/23 season registered a 3% YoY decrease in performance, with the long fine commercial rice variety dominating production. Argentina, the world's second-largest rice producer in Latin America, with a 5% global share, primarily cultivates rice in provinces like Corrientes, Entre Ríos, Santa Fe, Chaco, and Formosa. A recovery is anticipated in the 2023/24 season, driven by improvements in global rice prices registered from 2019 to 2021.