Workers pack bags with rice in Vietnam's Yen Bai province on July 27, 2022. - AFP
HANOI: Decreasing input costs as Europe eases sanctions against Russia and increased fertiliser supply will benefit rice export businesses, according to Vietcombank Securities Company (VCBS).
A recent report on the rice sector from VCBS showed that the global rice output is estimated at 519.7 million tonnes at the end of the 2021/2022 crop.
China, India, and Asean are key consumption markets, while India, Vietnam and Thailand are the largest rice exporters.
Rice prices witnessed an uptrend in global markets last year as the Indian government’s ban on rice export, floods in Pakistan, and adverse weather in China and the Philippines caused reductions in rice output in these countries.
While depleted inventories in the Philippines will result in higher imports in 2023, rice production will drop due to prolonged droughts in China and India.
On the other hand, due to heavy rain in Vietnam over the past year and gradually neutral weather in the first half of 2023, the country’s rice output is forecast to be stable this year, according to the US Department of Agriculture.
Therefore, Vietnam is very likely to benefit from the upward trend in rice prices which is fuelled by limited supplies and a shift away from the Indian supply, according to VCBS.
Meanwhile, input costs are also expected to go down in 2023 as Europe eases sanctions and welcomes back Russian fertiliser exporters, increases reservations, and aggressively reduces gas consumption.
The availability of fertiliser on a global scale is anticipated to rise, boosting rice industry profit margins.
According to VCBS, the business growth prospects of Loc Troi Group are positive thanks to the promotion of rice exports to the European market, starting with the French market. The merger with Loc Nhan Food also increased the company’s capacity. — Viet Nam News/ANN
