The price of rice in the domestic market is currently on a downward trend, with a decrease of 1,000 VND/kg, equivalent to 2,000 VND/kg of rice, from the 6th day of the Lunar New Year until today. The sharp decrease in rice prices has caused traders to suffer losses, while businesses that had signed contracts to sell rice before the Tet holiday are making a profit.
Illustration photo: Rice for export
Rice prices are trending downwards
In the rice market, on February 20, the prices of different types of rice continued to decrease by 100 – 200 VND/kg compared to February 19. In An Giang, Kien Giang, and Dong Thap provinces, although there is a high supply of rice, the warehouses are only buying in small quantities, leading to slow trading and price reductions.
Specifically, at the rice markets in An Cu and Cai Be (Tien Giang province), the prices of OM18 and DT8 raw rice are around 12,900 – 13,000 VND/kg, a decrease of 100 VND/kg, while the price of OM5451 raw rice fluctuates around 12,000 – 12,300 VND/kg, a decrease of 200 VND/kg.
According to AgroMonitor, the market situation on February 21 is different from the previous day (February 20). While there was a large supply of rice boats yesterday morning, this morning, the area along the Sa Dec River was relatively quiet with fewer rice boats and vendors suspending their sales. Only a few small boats were seen selling rice. Warehouses are buying slowly and waiting to observe the market before making any purchases.
As of 8:40 AM on February 21, the prices of different types of rice have continued to decrease by 100 VND/kg compared to the morning, causing traders to collectively withdraw their deposits. However, farmers are actively selling their rice crop, especially the harvested or mature golden rice that has not been sold. Traders are not willing to buy these rice crops and some are even withdrawing their deposits for the high-priced rice they had reserved earlier.
Mr. Tran Quoc Phuong, CEO of Hiep Tai Company, expressed his confusion about the sudden and significant decrease in rice prices. In just one day, the prices have plummeted by 200 – 300 VND/kg.
Since the Lunar New Year to date, rice prices have dropped by 1,000 VND/kg, equivalent to 2,000 VND/kg of rice. Previously, the prices of different types of raw rice such as DT8, OM5451, and OM18 were around 15,500 VND/kg, but now they are only around 13,500 VND/kg. Due to the sharp decrease in rice prices, the prices of rice in the fields have also decreased, causing traders to withdraw their deposits and refuse to buy rice from farmers, as they would incur losses if they purchase at the current prices.
Rice prices have decreased for most businesses that signed contracts before the Lunar New Year holiday, while businesses that won the Bulog bids have made a profit
Normally, prices in the domestic rice market tend to decline when there is no demand for exports. However, there is still a high demand for rice exports as Vietnam recently won the bid for nearly 400,000 tons of rice from Bulog, with deliveries taking place in February and March. In addition, many businesses have signed contracts to sell rice to foreign traders.
“This is the first time I have seen such a rapid and significant decrease in rice prices. Despite the fact that there is still demand in the market, I really don’t understand why rice prices are falling so quickly. It may be due to the psychological perception that rice prices will continue to drop, causing people to hesitate in making purchases,” said Mr. Phuong.
Most warehouses, suppliers, and exporting businesses are currently waiting for market signals. Meanwhile, there is a continuous influx of rice from the Winter-Spring crop, resulting in an excess supply of rice and further reducing prices. However, according to Mr. Phuong, this situation may last for only about 10 to 15 days. As the Winter-Spring crop approaches its end, the supply of rice will decrease, causing rice prices to rebound.
Furthermore, Mr. Phuong added that at the end of January 2024, after Vietnamese businesses dominated the Bulog bids, foreign traders believed that rice prices in Vietnam would continue to rise until the end of February 2024. As a result, they increased their contracts to purchase rice from Vietnamese businesses. Despite the current decrease in rice prices causing concerns for farmers, most businesses that signed contracts before the Lunar New Year holiday and those that won the Bulog bids are making large profits, even higher than businesses from Thailand that did not win as many Bulog bids.
Currently, Hiep Tai Company is still delivering rice to fulfill contracts signed at the end of 2023 and in January 2024, which means that the rice export prices were still high before the Lunar New Year holiday. It is not only Hiep Tai, but most other businesses have also signed contracts to sell rice at high prices.
According to Oryza, the Vietnam Food Association (VFA) reported that on February 20, rice prices for export from Vietnam, Thailand, and Pakistan all decreased compared to February 19. Specifically, Vietnam’s 5% broken rice was quoted at $628/ton, a decrease of $10/ton; Thailand’s 5% broken rice was offered at $614/ton (FOB), a decrease of $9/ton; and Pakistan’s 5% broken rice was quoted at $613/ton (FOB), a decrease of $6/ton.
