The Great Rice Export Challenge

According to the Vietnam Food Association, the export price of Vietnamese 5% broken rice has dropped to 467 USD/ton, a decrease of 14 USD/ton, while 25% broken rice stands at 437 USD/ton, down 17 USD/ton compared to the end of 2024.

Farmers’ Concerns

The US Department of Agriculture recently increased its forecast for India’s rice exports by 3 million tons to 21 million tons, while lowering its predictions for other countries such as Brazil, Pakistan, Thailand, and Vietnam. Agricultural expert Hoang Trong Thuy attributes this to an increase in global rice supply, as countries maintain stable production levels. Additionally, Indonesia’s decision to suspend rice imports for the whole of 2025 could result in the loss of orders from a market that typically imports 1-2 million tons of Vietnamese rice annually.

The drop in export prices has had a knock-on effect on domestic rice prices. Mr. Nguyen Cong Ly, a rice trader in Cao Lanh District, Dong Thap Province, reported that despite being in the middle of the winter-spring harvest, rice prices have been falling for about a week, with daily decreases of 100-300 VND/kg. Currently, IR 50404 rice is trading at 4,500-5,000 VND/kg, while OM rice varieties are just above or below 7,000 VND/kg. In contrast, during the same period last year, IR 50404 rice was priced at 7,000-7,500 VND/kg, and OM rice at 7,200-8,000 VND/kg. “With the current rice prices, farmers who own their land might break even, but those who rent land will incur losses,” Mr. Ly remarked.

Adding to the worries, many traders who had previously placed deposits of around 300,000 VND/worker are now backing out due to the falling rice prices. Several rice mills have also shut down, ceasing their purchases.

In Ca Mau Province, Mr. Nguyen Van Dien from Thoi Binh District reported a decrease of 4,000 VND/kg in ST 24 rice prices compared to 20 days ago, now trading at 8,000-8,200 VND/kg. Other varieties like OM 5451 and CM1 have seen their prices drop to 6,000-6,200 VND/kg, a reduction of 1,200-1,800 VND/kg from two weeks ago. The sharp decline in prices and the slow pace of traders’ purchases have left many farming households anxious about their livelihoods and the upcoming Lunar New Year celebrations. “Unfavorable weather conditions this year have already led to higher production costs, and now the drop in prices is further diminishing farmers’ profits,” lamented Mr. Dien.

Mr. Phan Hoang Vu, Director of the Ca Mau Department of Agriculture and Rural Development, acknowledged that Indonesia’s decision to stop importing rice, India’s removal of its rice export ban, and the wait-and-see approach of some countries for more favorable prices have impacted the domestic rice purchasing situation. “For now, we will encourage and guide farmers not to sell their rice in a hurry but to store it and wait for better prices,” Mr. Vu stated.

Mr. Do Ha Nam, Vice President of the Vietnam Food Association, warned that rice prices are falling rapidly, and enterprises should not panic and sell off their stocks, which could lead to even lower prices. “This new development also forces the rice industry to diversify its markets to avoid dependence on a single market. Currently, the Philippines dominates our export market, so any changes in their import policies will significantly affect Vietnam,” Mr. Nam analyzed.

Abundant Opportunities Remain

In 2024, the Philippines witnessed a surge in rice imports, totaling approximately 4.5 million tons, with over 3.5 million tons sourced from Vietnam, according to preliminary data from the country’s Department of Agriculture. This was attributed to increased consumer demand and a reduction in import tariffs from 35% to 15%. However, expectations for 2025 suggest that the situation may not remain as favorable.

Nevertheless, in a conversation with the Laborer Newspaper reporter, Mr. Phung Van Thanh, Commercial Counselor of Vietnam in the Philippines, assessed that despite ongoing challenges, Vietnam’s rice exports will continue to grow in volume this year. He projected that the Philippines will remain a significant importer of Vietnamese rice, with an estimated demand of 3.5-3.8 million tons out of the country’s total requirement of 4.4-4.7 million tons.

Regarding export prices, Mr. Thanh anticipated fluctuations and urged exporting enterprises to proactively gather market information and trends to adapt accordingly, thus minimizing risks. “Last year’s record-high rice exports were partly due to higher prices, averaging 627 USD/ton. The current drop in export prices can be attributed to India’s lifting of its rice export ban, which has exerted pressure on the global market,” he explained.

Mr. Tran Thanh Hai, Deputy Director of the Import-Export Department under the Ministry of Industry and Trade, emphasized the need for Vietnam to focus on producing high-quality rice, coupled with market diversification and brand building in traditional markets like the Philippines and Indonesia, to maintain its competitiveness.

Minister of Agriculture and Rural Development Le Minh Hoan acknowledged that while 2024 saw record-high rice exports, there are still untapped potentials within the industry. For instance, the circular agriculture model in the rice sector is still in its infancy, focusing primarily on the sale of raw rice grains. By-products like husks, straw, and rice bran, which can be used for growing mushrooms, producing pellets, and manufacturing biological preparations and cosmetics, are often overlooked, leading to waste.

Minister Hoan underscored the importance of enhancing the value of rice products, especially as agricultural land will become increasingly scarce. He also emphasized the need to expand markets and even consider investing in rice cultivation in import markets like Africa. “If other countries get there first, we will lose out. Why don’t we take the initiative?” he suggested.