Announced on Wednesday 25 March, the Vietnamese authorities’ decision to stop signing new rice export contracts until further notice has been a bombshell. And for good reason, as the world’s third largest exporter of rice (6.37 million tonnes in 2019) behind Thailand and India, the Southeast Asian country is a major player in the supply of the world’s most consumed cereal, with many African countries importing large quantities of it.
A decision that the Vietnamese government justifies primarily by the need to preserve its own domestic market, as the country’s rice exports jumped by nearly 32% (to 928 798 tonnes) in the first two months of 2020 compared to the previous year, in the wake of fears of food shortages linked to the Covid-19 pandemic. At the same time, Hanoi notes, rice production is expected to be lower this year than in previous seasons due to drought.
As a result, « if exports continue to increase at this rate, Vietnam will face the risk of a shortage of domestic consumption, » warned the Ministry of Industry and Trade, thus preparing minds for possible rationing of rice on international markets. Vietnamese Prime Minister Nguyen Xuan Phuc, however, said he would give himself until Saturday 28 March to make a final decision on this issue, in time for him to read the report on the state of rice stocks in the country. Jointly reported by Radio France Internationale (RFI), a Swiss trader, on condition of anonymity, said that in the event of an embargo on Vietnamese rice exports, « it would be the spark » that could lead to a new surge in world prices. A possibility that raises the spectre of the 2007-2008 global food crisis. At the time, a sharp rise in the price of basic foodstuffs caused riots in several countries, particularly in Africa. In fact, international rice prices have been on the rise for several weeks now, with the 100% Thai variety already at a 7-year high. However, the above-mentioned trader wanted to reassure, recalling that there was (for the time being) « no panic buying in Africa ».