Vietnam's rice export industry is facing significant challenges as global supplies increase and international prices fluctuate. The latest statistics from the Vietnam Food Association reveal disturbing trends for the country’s rice exporters, who grapple with lower prices compared to countries like Thailand, India, and Pakistan.
According to data from the Association of Vietnam Food (VFA) reported on February 18, Vietnam's 5% broken rice is priced at about $395 per ton. That’s markedly lower than Thailand's $418 per ton and India’s $413 per ton. Consequently, Vietnam's rice competitiveness is waning as the country is now the lowest-priced exporter among the top global suppliers.
Looking forward, the U.S. Department of Agriculture (USDA) projects global rice production for the 2024-2025 season to hit a record 532.66 million tons. This figure marks nearly ten million tons more than the previous season. While Vietnam is expected to increase its production alongside competitors like India, Thailand, and Pakistan, the result is stagnation for export prices due to oversupply. Notably, India's rice output could reach 145 million tons, representing a significant increase, alongside a substantial uptick from the aforementioned countries. This surge is contributing to global market saturation.
The demand scenario is equally concerning. Traditional buyers of Vietnamese rice seem hesitant, fearing prices might continue to decline, especially post the lifting of export bans by India. The Vietnam Commodity Exchange (MXV) indicates the global rice market has recently observed slower trading patterns, disrupting the usual seasonal cycles.
Nguyen Ngoc Quynh, Deputy Director of MXV, expressed concern about the continued pressure on global rice markets with no immediate rebound in demand forecast. Most of the significant importers, like Indonesia and the Philippines, are currently reevaluing their purchase strategies amid price drops.
To address these challenges, the Ministry of Agriculture and Rural Development (MARD) has formulated strategies aimed at enhancing rice quality and marketability. For 2025, it estimates the Mekong Delta will see rice cultivation over roughly 3.778 million hectares, expected to yield around 23.965 million tons. Of this, about 7.542 million tons is slated for export.
To bolster rice exports, MARD urges the Ministry of Industry and Trade to concentrate on months with increased harvests—namely February, March, April, July, August, and September—to capitalize on market movements. They also suggest boosting trade promotion efforts to open new export markets to absorb surplus production.
MARD is also advocating for more professional regulations of rice traders, who should have registered businesses and formal contracts with farmers. This initiative aims to streamline operations and improve quality control throughout the supply chain. A corresponding shift shows the area planted with rice is likely to drop slightly to about 7 million hectares, with production anticipated at around 43.143 million tons.
Tran Thanh Hai, Deputy Director of the Department of Import and Export under MARD, stated the decrease in rice prices is consistent with global trends influenced heavily by India’s decision to sell off its surplus stock following the removal of exporting restrictions.
Despite these market pressures, the government emphasizes the gains made by Vietnamese rice brands. Although prices might fall now, the groundwork has been laid for long-term growth with improved product quality and strong brand identification, coupled with supportive government policies.
Enterprise and farmer collaborations will also be pivotal. Supported by banks and financial institutions, producers may access favorable loan conditions to stock up on rice when prices dip, helping stabilize domestic markets.
On the international trade front, the government has enacted Decree 01 which reforms the management of rice exports with the intention of ensuring food security whilst fostering export capacity. This decree aims for greater transparency and efficiency, ensuring the industry's resilience amid fluctuative global markets.
Vietnam’s rice export industry stands at a crossroads. With global pressures mounting, it must adapt through sustainable practices and responsive export strategies. Focusing on both enhancing product quality and strategic domestic support mechanisms will be integral for the industry as it strives for competitiveness.