W51 Rice Update: Global Rice Prices Surge to 15-Year High, Vietnam's Rice Exports are Anticipated to Exceed 8 MMT in 2023

Global Rice Prices Hit 15-Year High Amid Concerns of Diminishing Supply

Global rice prices surged to the highest level in 15 years, reaching USD 650 per metric ton (mt) for Thai white rice, driven by concerns about diminishing grain supply due to increasing demand and the impact of El Niño phenomenon across Asia and Africa, posing challenges for rice-dependent countries and raising concerns about global food inflation.

Record Profits for Vietnamese Rice Farmers Amid Global Demand Surge and Price Escalation

Vietnamese rice farmers experience record-high profits due to the increasing rice demand. The Đồng Tháp Department of Agriculture and Rural Development reported a decrease in production costs, which has led to an average profit of USD 943 to 1,271 per hectare (VND 23 to 31 million/ha). This marks an increase of USD 574 to 648/ha compared to the previous year. Farmers in An Giang sell rice varieties like IR50404, OM 5451, Đài Thơm 8, and OM 18 for USD 0.37 to 0.385 per kilogram (VND 9,000 to 9,400/kg). Additionally, dry glutinous rice is priced between USD 0.39/kg (VND 500/kg) and USD 0.402 (VND 9,800/kg), which is an increase of USD 0.041/kg (VND 1,000/kg) to USD 0.103/kg (VND 2,500/kg) compared to last year.

Global rice purchases surged, leading to limited supply during the autumn-winter crop, further propelling prices. Data from the Vietnam Food Association reveals that, as of December 22, 2023, Vietnam's 5% broken rice prices reached USD 653/mt, nearly USD 5/mt higher than Thai goods. With exports dwindling and domestic rice prices 10% higher than export prices, businesses suspend new export orders to avoid potential losses.

Vietnam to Surpass 8 mmt Rice Exports in 2023

According to the Deputy Minister of Agriculture and Rural Development of Vietnam, Vietnamese rice export volume will surpass 8 million metric tons (mmt) in 2023, an 11% increase compared to 2022. Acknowledging Vietnam's pivotal role in ensuring national food security and promoting export growth, the Prime Minister implemented a customized rice trade promotion plan to enhance the value of Vietnamese rice products. Furthermore, the effective utilization of preferential mechanisms from various free trade agreements aims to diversify the nation's rice industry, explore new markets, and strengthen competitiveness.

Indonesia Secures Rice Import Commitments from India and Thailand

Indonesia has solidified rice import commitments from India and Thailand to guarantee a stable supply in 2024. The initial agreements, signed by the country's food procurement agency Bulog, cover 1 mmt from India and 2 mmt from Thailand. The President of Indonesia expressed concerns about food prices despite low headline inflation, citing the impact of the recent super El Niño on rice production. The rice imports from Thailand were secured during a meeting with the Thai Prime Minister in Japan last week.