Vietnam's Exports Face Shipping Reroutes
Vietnamese rice exporters are facing significant logistical delays as shipping lines increasingly reroute vessels via the Cape of Good Hope due to security concerns in the Red Sea. This has led to a rise in more expensive combined sea-air transport for urgent shipments. The Vietnamese government is also promoting increased use of rail to export agricultural goods to China to mitigate ocean freight risks.
- Rerouting ships around Africa to avoid the Red Sea adds 10-15 days to transit times from Asia to Europe and has caused freight rates from Vietnam to Germany to triple. J.P. Morgan estimates these disruptions could add 0.7 percentage points to global goods inflation in the first half of 2024. - India's export ban on non-basmati white rice, in place since July 2023, caused the benchmark price for Thai white rice (5% broken) to jump by 22%. This restriction led to a 93% decline in India's non-basmati white rice export volumes between August and November 2023. - Thailand is forecast to export up to 9 million tons of rice in 2024, benefiting from reduced competition from India. However, Vietnam is projected to export a record 9.04 million tons in 2024 and may surpass Thailand as the world's second-largest exporter. - The European market for specialty rice is projected to grow at a compound annual growth rate (CAGR) of 2.8% between 2025 and 2033, with strong consumer demand for premium aromatic varieties like Jasmine and Basmati, as well as organic and sustainably sourced products. - Effective March 7, 2024, the EU imposed an import tariff of €30 per metric ton on rice with shells (CN code 100620), although Basmati rice is excluded from this duty. - The Thai Baht has seen volatility against the Euro, reaching a high of approximately 0.0275 EUR per THB in January 2026. A stronger baht could negatively impact the price competitiveness of Thai rice exports in the European market.
