India’s Rice Export to Vietnam
Recently, the third-biggest exporter of rice in the world, Vietnam has started buying rice from India for the first time in decades. This has happened after local prices of the grain in the country reached their highest in 9 years due to limited domestic supplies. The reason behind the rise in the rice prices in Vietnam is decreasing supplies and continued buying by the Philippines.
- As per the export contract with Vietnam, Indian traders will be exporting 70,000 tonnes of 100% broken rice at about $310 per tonne for January and February shipments on a free-on-board basis.
- As the supplies of rice are tightening in Asia, it can lead to increase rice prices in 2021 and also force traditional buyers of rice from Vietnam and Thailand to switch to India for purchasing the grain.
- India is the biggest exporter of rice in the world.
- This export to Vietnam has been possible due to the huge difference in rice prices in India. These prices are attractive and can attract many buyers.
- The price of 5% broken rice in Vietnam is about $500-$505 per tonne as compared to the Indian price of $381-$387 per tonne.
- As per the provisional data from the trade Ministry, India exported a record 14 million tonnes of rice in the year 2020.
- Last year in December, China also started buying rice from India for the first time.
Impact of Pandemic
As an impact of the COVID-19 pandemic, many countries have started stockpiling rice. In 2020, Vietnam announced that it will stockpile 270,000 tonnes of rice.