In an unexpected turn of events, Vietnamese rice prices have witnessed a remarkable surge, surpassing even Thailand to become the world’s highest-priced exported rice. This surge has been triggered by recent developments in the global rice trade dynamics, particularly with Vietnam’s entry into the US market.
Vietfood, the Vietnam Food Association, reveals that following India’s imposition of a ban on exporting common rice varieties, both Vietnamese and Thai rice have experienced an upward trend in prices, setting new records. This shift is especially noteworthy considering that India, Thailand, and Vietnam are the world’s three largest rice-exporting countries.
Specifically, on July 19th (prior to India’s export ban)
Vietnamese 5% broken rice was priced at $533 per ton, nearly equivalent to Thai rice at $541 per ton. However, the prices have escalated considerably since then. As of August 10th, Vietnamese 5% broken rice and Thai rice reached $638 and $651 per ton, respectively, marking an increase of $105 and $110 per ton.
Over the subsequent trading sessions, Vietnamese and Thai rice prices have fluctuated. Thai 5% broken rice witnessed significant declines on August 16th and 17th, plummeting to $613 per ton, only to rebound to $618 per ton on August 18th.
In contrast, Vietnamese rice experienced slight fluctuations in the days leading up to August 17th, then rose modestly by $5 per ton to reach $628 per ton, maintaining stability on August 18th. Similarly, Vietnamese 25% broken rice also surged recently, reaching $618 per ton.
Notably, on August 18th, both Vietnamese 5% and 25% broken rice surpassed their Thai counterparts by $10 and $57 per ton, respectively, establishing Vietnam’s exported rice as the world’s highest-priced.
With regard to rice export dynamics, Vietnam’s Minister of Agriculture and Rural Development, Le Minh Hoan, mentioned that
As India and several other countries halted rice exports, nations turned to Vietnam to meet their rice demands. The Philippines, China, Indonesia, among others, have shown increased interest in Vietnamese rice, leading to a surge in demand ranging from 40% to several times higher.
Recently, Lộc Trời Group, a major Vietnamese rice exporter, secured contracts worth $127 million for rice exports to Indonesia and Malaysia. The exported rice is set to be delivered to these partners in 2023.
According to data from the General Department of Customs, in the first seven months of this year, Vietnam exported nearly 4.9 million tons of rice, earning $2.62 billion, marking a 20.1% increase in volume and a 31.4% increase in value compared to the same period in 2022.
The Philippines remains Vietnam’s largest rice customer until the end of July 2023, importing nearly 1.94 million tons of rice with a value of $984.9 million, a decrease in volume by 2.1% but a value increase of 6.5% compared to 2022.
Following the Philippines are China and Indonesia. Specifically, rice exports to China reached $413.5 million, a significant increase of 70.3% from the previous year. Exports to Indonesia skyrocketed by an astounding 1,527%, totaling over $299.4 million, more than 16 times higher than 2022.
Of note, within the first seven months of 2023, various markets have significantly increased their purchases of Vietnamese rice. Exports to Turkey reached $7.1 million, nearly 75 times the figure from the previous year. Similarly, exports to Chile multiplied by more than 27 times, Belgium nearly quadrupled, and Taiwan increased by 2.8 times.
Domestically, rice prices have also surged. A processing company’s director noted that some rice varieties have surged by up to 50% in the past month alone.
For example, the price of the 504 rice variety has increased from 10,000 VND/kg to 14,000-15,000 VND/kg. This trend has led to a 30-40% increase in rice purchases at MM Mega Market Vietnam.
While supermarket prices are expected to remain stable in August, there are plans for slight increases in September. These adjustments are inevitable due to market pressures, as confirmed by industry representatives.
Throughout August, various types of rice at markets and stores have increased by 2,000-3,000 VND/kg, depending on the variety. Retail prices are expected to be adjusted further in the near future due to the need for new imports as the previous stock from July nears depletion. With the continuing upward trend of rice prices in the Southern region, retail prices are likely to follow suit.
Domestic Rice Prices Reverse After a Steady Surge
Data from Vietfood reveals that after three consecutive weeks of substantial increases (July 20th – August 10th), domestic rice prices have experienced a reversal in trend during the latest week (August 10th – 17th).
Specifically, the average price of regular paddy rice in fields increased by 64 VND/kg to 7,850 VND/kg. However, the price of regular paddy rice in warehouses dropped by 333 VND/kg to 9,083 VND/kg. White rice type 1 decreased by 258 VND/kg to 14,667 VND/kg, while 5% broken rice dropped by 148 VND/kg to 14,486 VND/kg. Similarly, 15% broken rice and 25% broken rice both decreased by 142 VND/kg, reaching 14,208 VND/kg and 13,892 VND/kg, respectively.
In a conversation with VietNamNet, rice expert Võ Tòng Xuân stated that prices adhere to market supply and demand dynamics. When global rice export prices surge, domestic rice prices are naturally adjusted accordingly, and vice versa.
However, strict control is essential to prevent speculation and avoid inflating domestic market prices. Enterprises and traders must exercise prudence in their current buying and selling activities.
Recently, the Ministry of Industry and Trade urged the Market Surveillance Agency to closely monitor rice prices, inspect and control wholesale and retail establishments, markets, supermarkets, commercial centers, and warehouses. The aim is to ensure supply control, price stability, and to curb violations related to price listing, speculation, hoarding, and unreasonable pricing for rice products.