The world's third biggest exporter of rice Vietnam, has now started to buy the grain from rival India for the first time in decades after the local prices jumped to the highest in 9 years and also due to limited domestic supply in Vietnam.
This purchase shows how desperate someone can be when economy is tightening up. According to reports the prices of rice will increase more in 2021 and can force traditional buyers of rice from Thailand and Vietnam to switch to India.
Industry officials have said that Indian Traders have been contracted and asked to supply 70,000 tonnes of 100% broken rice for January and February shipments at around 310$ (22,700 INR) per tonne on Free-On Board (FOB) basis.
BV Krishna Rao, President of Rice Exporter Association has said "For the very first time,we are exporting to Vietnam. Indian Prices are very attractive. The Huge price difference is making exports possible."
At the moment Vietnam's 5% broken rice is offered at 500$-505$(36,615-36,981 INR) per tonne, significantly higher than compared to Indian prices of 381$-387$(27,901-28,340 INR).
Vietnam had announced last year that they will stockpile up to 270,000 tonnes of rice to ensure food availability amid COVID-19 crisis. If the huge price difference continues to stay as it is, Vietnam may make more purchase from India.
In 2020, India exported a record of 14 million tonnes of rice.
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