India, Thailand, Vietnam & Pakistan are among the biggest exporters of rice in the world.
After India & Thailand, Vietnam is the third-largest rice exporter but is on the way of becoming the second largest by the end of 2020. As far as Vietnamese 5% broken rice is concerned in the first 7 months of 2020 the average export price jumped to $ 487.2/MT, highest since 2011. The reason behind this being COVID-19 & EU-Vietnam free trade agreement (EVFTA).
The pandemic has pressured many countries to increase rice purchases some of these markets are Senegal, Indonesia, China. While EVFTA has allowed the country an export tax of 0% to the EU resulting in price competitiveness for Vietnamese rice & reduction in import hurdles for EU buyers.
Global Rice Trade is around 40-45 million tons out of which India contributes to 11 million tons from which 4.4 million tons is Basmati rice. Reportedly from AIREA production will be higher this year while domestic consumption is increasing & newer markets for exporters are opening up.
While Indian exporters of non-Basmati rice have seen a surge in orders after the price increase in Vietnam & Thailand. In the first four months of FY2020-21, non-Basmati rice exports from India went up by 35% compared to FY2019-20.
The second-largest supplier in the world is Thailand that might currently shift to the third spot due to a decrease in exports this year with estimates of 7.5 million MT less than 10 million MT of the last 2 years in a row. The decrease is estimated due to the reason that the country has been exporting the same variety of rice for 30 years with a lack of new varieties & innovation. While its close competitor Vietnam has developed fragrant as well as soft-textured white rice.
Another factor is the higher production cost compared to Vietnam. One more risk component being EVFTA which is expected to increase Vietnam's share in Europe.
The overall spread of the virus has increased demand for rice in Asia but it might be difficult for Thailand to reach its export target of 7.5 million MT. Currently, its biggest markets are west African countries such as Benin.