The past 2023 was a volatile year for the global rice trade. India as the world's largest rice exporter, turnover accounted for nearly one-third of the world, after its announcement of the ban on rice exports, importing countries scramble to find new sources, the global rice supply chain has undergone a major shift, Thailand and Vietnam's rice exports surge, Indonesia's rice imports rose sharply to become the world's second largest importer of rice.

According to the USDA, the global rice shortage is expected to be about 7 million tons in 2024, creating new opportunities for Southeast Asian rice exporters, including Vietnam and Thailand.

Thailand: building a high-quality rice exporter

Thailand is the world's second largest rice exporter. Thailand's rice exports reached 8.76 million tons in 2023, up 13.7% year-on-year, the highest level since 2018, according to data released by the Ministry of Commerce. At the same time, Thailand's rice export price also continued to climb, up 41%. Recently, Thailand's rice export price of 5% broken rice rate was $655 to $660 per ton, a record high since 2008.

Thailand may regain the export market for rice from sub-Saharan Africa due to export restrictions on Indian rice. The global rice supply chain is shifting. Sub-Saharan Africa imported rice mainly from India from 2019 to 2022 due to low rice prices in India. However, since July 2023, when India increased its ban on exports of non-basmati white rice, exports of broken rice to sub-Saharan Africa have declined rapidly. Sub-Saharan Africa may revert to Thailand for rice. Thailand was known to have been a major supplier of rice imports to sub-Saharan Africa until 2019.

The great opportunities in the export market and the fierce competitive environment have also made the Thai government realize the importance of rice quality, so it plans to become the world's No. 1 exporter of high-quality rice in three to four years. Thailand's Ministry of Agriculture and Cooperatives recently said that the Thai government is committed to producing high-quality rice, promoting research and development of multiple rice varieties, and increasing production potential to respond to the needs of the global market. Previously, Thailand's food department has conducted continuous certification work on more than 172 rice varieties, covering all varieties of rice grown in Thailand, and is preparing to announce the certification of more new high-yield rice varieties. Some of these new varieties of rice have a growing period of about 110 to 115 days. In addition, the Thai government has developed a detailed quality inspection process for all types of exported rice, and exported rice must be inspected by a specialized Rice Inspection Committee and meet the standards before being approved for export.

In order to enhance the international competitiveness of Thai rice, Thailand is strengthening the export of soft white rice. Previously, Thailand's exports of white rice is mainly hard white rice, soft white rice, although not the flavor of fragrant rice, but the texture of fluffy, more to meet consumer tastes. Moreover, soft white rice has the advantages of high yield, low input and low price. 2023, the Thai Ministry of Commerce has organized a promotional campaign called "Think of Thailand when you think of rice", focusing on the promotion of Thai soft rice to overseas markets.

Vietnam: Striving for rice branding

The year 2023 is considered to be a good year for rice harvest and price in Vietnam. According to Vietnam's Ministry of Agriculture and Rural Development, in 2023, Vietnam's rice production reached 43.4 million tons, up 1.7% from the previous year. in 2023, Vietnam's rice exports to Indonesia increased more than 10 times, exports to Singapore increased by about 40%, and exports to Ghana increased by almost 60%. Vietnam's annual rice exports in 2023 amounted to $4.78 billion and 8.13 million tons, an increase of 14.4% in export volume compared to 2022, according to statistics from the General Department of Vietnam Customs. The result allows Vietnam to maintain its position as the world's third largest rice exporter after India and Thailand. The Vietnam Statistical Office expects Vietnam's rice exports to reach 500,000 tons in January this year.

The export price of Vietnamese rice, in particular, has risen to its highest level in 15 years over the past year, at one point even surpassing the prices of rice from Thailand and India. 2023 saw the average export price of Vietnamese rice for the year reach an all-time high of US$575 per tonne. december 2023 was the highest export price ever for Vietnamese rice, up 32% from the price of exports at the start of 2023. In the first half of 2024, the Philippines, China and Indonesia remain the main export markets for Vietnamese rice.

In the past three years, Vietnam's rice export market has been improving, with production increasing year by year. Among them, export rice production reached 6.15 million tons in 2020, increased to 6.2 million tons in 2021, soared to 7.1 million tons in 2022, and reached 8.13 million tons in 2023. As the rice trade continues to thrive, some of Vietnam's big exporters have nearly swept their warehouses clean to cope with export demand, and during the peak trading season, these enterprises need to wait for new goods to replenish their stocks before they can continue trading. The growing export volume shows that Vietnam's rice supply is stable and the supply chain has been formed.

Notably, Vietnam's rice exports have not only increased significantly in terms of quantity and value, but also in terms of brand quality, with Vietnam's ST25 rice winning its second consecutive "World's Best Rice" award in 2023.

According to the Vietnam Rice Export Market Development Strategy to 2030 released in May 2023, Vietnam will improve the competitiveness of rice export traders, strengthen the value chain from production to consumption and export; build the direction of specialization and modernization of the country's rice production; and take productivity and quality as the highest standards. Vietnam's strategic goal is to strive for a branded rice export ratio of more than 40%.

Importing countries struggle to find stable sources

India accounts for about 40% of the world's rice exports, and its rice exports reached a record 21.5 million tons in 2021, exceeding the combined exports of four rice-exporting countries - Thailand, Vietnam, Pakistan and the United States. India's rice export restrictions since September 2022 have seen a major shift in the global rice supply chain as importing countries struggle to find a stable source of rice.

Indonesia's rice imports increased significantly in 2023, making it the world's second-largest importer of rice.Indonesia's rice imports were close to 3.1 million tons in 2023, compared to less than 800,000 tons in previous years.Indonesia imported 1.38 million tons of rice from Thailand in 2023, or 45 percent; 1.14 million tons from Vietnam, 310,000 tons from Pakistan, 140,000 tons from Myanmar, and 80,000 tons from other countries importing 80,000 tons. When Indonesian President Joko met with the Thai Prime Minister in December 2023, he pledged to import 2 million tons of rice in 2024 from Thailand. In addition, Indonesia has a rice import agreement with Cambodia.

Rice is a basic staple food in the Philippines, which has been one of the largest rice importers in the world. Currently, the Philippines is Vietnam's largest rice-consuming market, with a market share of about 42 percent. In January this year, during the Philippine President's visit to Vietnam, Vietnam made a five-year trade commitment to supply up to 2 million tons of rice to the Philippines at a favorable price to ensure food security for the Philippines "under the impact of climate change, epidemics and other external events." According to Vietnamese media, the Philippines will continue to be Vietnam's largest rice export market.

Regarding the global rice market outlook for 2024, industry insiders predict that rice prices will remain high due to limited supply. India is likely to continue to implement export restrictions after the election, the impact of El Niño is likely to continue into the middle of the year, and countries such as Indonesia and the Philippines will still need to increase rice imports.