In a major development, Vietnam has begun purchasing rice grains from India for the first time in several decades, reported Reuters. This is despite the fact that the Southeast Asian country is the third-largest exporter of rice in the world.
As per reports, Vietnam has been forced to import rice from India, after local prices reached their peak in nine years. The problem is further accentuated due to limited domestic supply and continued purchase of rice grains by Philipines from Vietnam. As such, export prices reached a 9-year high, forcing the country to look for cheaper imports.
High export prices for rice in Vietnam has raised concerns of sub-Saharan nations, which import rice to meet the growing demands of its population growth. To add to the problem, the Coronavirus pandemic has disrupted supply chains, a rise in unemployment, leading to an increase in chronic and acute hunger. In order to ensure food security, Vietnam had earlier announced that it would stockpile 270,000 tonnes of rice. It must also be mentioned that the paddy output of the country fell (1.86%) to 42.69 million tonnes in 2020.
Vietnam turns to India for rice exports
Amidst the crisis, Vietnam has ordered shipments of 70,000 tonnes of 100% broken rice from India for the month of January and February. Industry officials informed that the shipments would be provided on a free-on-board (FOB) basis at $310 per tonne. Comparatively, Vietnam’s 5% broken rice would cost around $500-$505 per tonne.
BV Krishna Rao, Rice Exporters Association President, said, “For the first time we are exporting to Vietnam. Indian prices are very attractive. The huge price difference is making exports possible.”Nitin Gupta, the vice president of Olam India’s rice business, stated that demand from Asian and African countries are contributing to rise in export prices but hoped to stay competitive due to available stocks.
Last year, India exported a whopping 14 million tonnes of rice. And from December 2020, China also began importing rice from India after decades. As such, it is believed that if such trends continue, countries which traditionally import rice from Thailand and Vietnam might turn towards the world’s largest exporter of rice, India.