Once Boasting the Highest Global Prices, Vietnamese Rice Loses Its Edge
Vietnamese rice, which once commanded the highest prices in the global market, has now slipped to the sixth position. The country's 5% broken rice variety was quoted at USD 540 per ton on June 6, lower than the prices offered by the U.S., Thailand, Pakistan, Myanmar, and India. This marks a significant 16.5% drop from the historic peak reached in December.
The current Vietnamese rice prices are a staggering 15% lower than those of Thailand, traditionally a key competitor in the global rice trade. Concerned by the falling prices, the Vietnam Ministry of Industry and Trade has instructed the Vietnam Food Association to investigate exports to Indonesia, warning that excessively low prices might violate competition laws.
To safeguard the interests of farmers, the ministry is considering activating minimum export prices for the upcoming Summer-Autumn crop, which will be harvested from late June until September.
Despite the price challenges, Vietnam's Loc Troi Group recently won a bid to supply rice to Indonesia's state-owned Perum Bulog at USD 563 per metric ton – a price 5% lower than initially expected.
The country's rice exports have shown resilience, rising by 34.8% year-on-year to reach USD 2.3 billion in the first five months of 2024. However, the declining prices raise concerns about the profitability and competitiveness of Vietnamese rice in the global market.
As Vietnam navigates these challenges, the government's intervention and potential implementation of minimum export prices could play a crucial role in stabilizing prices and protecting the interests of the country's rice farmers.
