Price spikes threaten rice sector performance

Vietnam’s rice exports have been on the rise constantly from the start of the year. In June alone, the rice export price averaged $552 per tonne, up 9 per cent compared to early in the year, setting a new record.

Despite the price surge, the business outcome in the second quarter and the first six months saw a decline for many rice businesses, with only a few seeing high profits.

Trung An High-tech Farming JSC eyed a staggering growth in its revenue in Q2, yet saw losses for the first time since entering the bourse in 2019.

The company posted $68.1 million in revenue in Q2, up 111 per cent on-year. However, due to a spike in the cost of sales which touched $65.3 million, up 129 per cent and 40 per cent jump in financial costs, primarily due to soaring interest payments, Trung An recorded $337,550 in losses, compared to gaining $1 million in profit a year ago.

In H1, despite posting a 46 per cent jump in its revenue to reach $106 million, Trung An raked in merely $25,300 in post-tax profit, down 99 per cent compared to one year ago.

The company is set to reach $160 million in revenue and $2.1 million in post-tax profit for 2023.

Similarly, An Giang Agriculture and Foods Import-Export JSC (Afiex) saw a 44 per cent jump in its Q2 revenue to reach $24.7 million, yet post-tax profit registered a 70 per cent dip, falling to just $210,970.

In H1, the company’s revenue came to $38.9 million, up 47 per cent, while net profit dropped 82 per cent on-year, falling to $417,720.

Similarly, An Giang Import Export JSC (Angimex) raked in $6.87 million in revenue in Q2, down 88 per cent on-year, and lost $1.4 million in post-tax profit during the period.

This is the fourth consecutive quarter that Angimex eyed losses.

In H1 generally, the company counted $2.8 million in losses, much higher compared to loss figure approximating $261,600 one year ago.

Meanwhile, Vietnam National Seed Group (Vinaseed), one of the first sci-tech enterprises in Vietnam’s seed industry, posted around $35.2 million in revenue in H1, down 7 per cent on-year, and registering $3.92 million in post-tax profit, down 24 per cent on-year.

In H1 Vinaseed fulfilled 38 per cent of full-year revenue, and 32 per cent of full-year profit targets.

In its latest report, Tien Phong Securities JSC (TPS) SAID that Vietnam’s rice export eyed factors, such as deficit in the global food supply, and lasting drought casting devastation on rice growing areas in many countries, which were leading to an increase in rice exports

TPS appreciates the rice export prospects to China as after nearly three years of closing the door, this country has removed stringent COVID-19 requirements, helping to facilitate goods moving over the border.

Besides traditional markets, Vietnamese rice is seeing widening opportunities for export to other potential markets, such as the UK.

In 2022, Vietnam posted more than $3.7 million from exporting nearly 3,400 tonnes of rice to the UK, up 24.5 per cent in volume and 34 per cent in value on-year.

Vietnam, however, just accounts for 0.6 per cent of the UK’s rice import market, placing 14^th among countries exporting rice to the UK.

Estimates show that by the end of July, Vietnam exported 4.83 million tonnes of rice valued at $2.58 billion, up 18.7 per cent in volume and 29.6 per cent in value compared to one year ago.

Exporters complain as cost for containers skyrockets The cost to hire shipping containers has skyrocketed to nearly ten times its pre-pandemic level, according to export businesses and trade agencies.

Cost concerns reach record high Conducted between February 14 and March 1, the latest edition of the Global Economic Conditions Survey (GECS) from the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA) reveals worries about operating costs, with warnings of future economic shocks and increased risks.

Broken rice ranks second among top 100 most tasty rice dishes in Asia by TasteAtlas Vietnam’s broken rice (locally known as com tam) was chosen the second place among the top 100 most tasty rice dishes in Asia by TasteAtlas, the home of local food, traditional restaurants, and authentic recipes, in March this year.

Ministry building long-term strategy on rice exports, market stabilisation: official The Ministry of Industry and Trade (MoIT) is building a long-term strategy on rice export and market stabilisation, following bans by several countries, according to Deputy Director of the MoIT's Import-Export Department Tran Quoc Toan.