Ishita Bora: The world’s third-biggest exporter of rice, Vietnam, has started buying rice from rival India for the first time in decades after local prices jumped to their highest in nine years amidst limited domestic supplies.
The report said that the purchases highlight tightening supplies in Asia, which could lift rice prices in 2021 and even force traditional buyers of rice from Thailand and Vietnam to switch to India – the world’s biggest exporter of the grain.
The industry officials said that Indian traders have been contracted to export 70,000 tonnes of 100 percent broken rice for January and February shipments at around $310 per tonne on a free-on-board (FOB) basis.
B.V Krishna Rao, the President of the Rice Exporters Association, stated:
“For the first time, we are exporting to Vietnam.”
According to the report, Vietnam’s 5 percent broken rice is offered around $500-$505 per tonne, which significantly higher compared to Indian prices of $381-$387.The shrinking supplies will heighten concerns about food insecurity with sub-Saharan Africa among the areas where import demand has been increasing due partly to population growth.
Also, traders said that the global pandemic has also prompted Vietnam and other countries to stockpile rice, where Vietnam announced last year it would stockpile 270,000 tonnes of rice to ensure food availability amidst coronavirus-driven supply chain disruptions worldwide.
Vietnam said that the rice from India had been stockpiled in government reserves since 2016-17 and its relatively cheap price reflected low quality.
Thus, a rice trader based in Ho Chi Minh City said:
“The rice quality is so poor that it is not good for direct consumption for humans, but only for producing animal feeds and beer.”
