Businesses sell at "big discounts", Vietnamese rice plummets to the lowest level in the world

Vietnam is a country with strengths in rice production and export. For many years, our country's rice exports have always ranked 2nd or 3rd in the world, but the price has always been lower than Thai rice. In 2023, the rice industry achieved an unprecedented success when export turnover set a historical record, and the price of this commodity increased sharply.

Notably, the price of Vietnamese rice is at times the most expensive in the world, nearly 80 USD/ton higher than the same type of rice from Thailand.

According to the report of the Ministry of Agriculture and Rural Development, by the end of May, our country exported 4.15 million tons of rice, worth 2.65 billion USD. Compared to the same period last year, rice exports increased by 14.7% in volume and increased sharply by 38.2% in value.

The average export price of 5% broken rice reached 638 USD/ton, up 20.5% over the same period in 2023.

However, after reaching a peak of 663 USD/ton on November 21 last year, the export price of 5% broken rice from our country has turned to decrease. Recently, the National Logistics Agency of Indonesia (Bulog) announced the bidding price for 300,000 tons of 5% broken rice for the 2023-2024 crop, Vietnamese enterprises surprisingly had the lowest bidding price compared to other international enterprises.

Specifically, Vietnamese enterprises bid the lowest price of 564.5 USD/ton, while the highest price was 658.5 USD/ton from Thai enterprises. The bid prices of Myanmar and Pakistan enterprises were 621.5 USD/ton and 633 USD/ton, respectively.

That is, the bidding price of Vietnamese enterprises is 94 USD/ton lower than that of Thai enterprises; 57 USD/ton and 68.4 USD/ton lower than that of Myanmar and Pakistan enterprises, respectively.

In recent days, the export price of Vietnamese rice has been on a sharp decline. According to data from the Vietnam Food Association (VFA), as of May 31, the price of 5% broken rice from Vietnam fell to 574 USD/ton.

From the country with the highest rice price in the world, Vietnamese rice is now 46 USD/ton lower than the same type of rice from Thailand and 19 USD/ton lower than that from Pakistan.

Compared to May 21 - the time Bulog announced the bidding results, the export price of 5% broken rice from Vietnam has decreased by about 15 USD/ton in less than half a month.

Domestic rice prices have also fallen sharply. Specifically, according to the VFA's weekly update from May 16-23, the price of regular rice in the field decreased to VND7,479/kg, regular rice in the warehouse decreased to VND9,283/kg; grade 1 white rice is priced at VND14,380/kg, 5% broken rice is priced at VND14,107/kg...

Experts say that businesses offering "big discounts" on rice to Indonesia have a big impact on Vietnam's rice industry.

The Import-Export Department (Ministry of Industry and Trade) recently sent an urgent document to the Vietnam Food Association expressing concerns and requesting VFA to verify information related to businesses bidding for the lowest rice price compared to businesses from other countries.

This unit believes that exporting rice at low prices may violate competition laws. Meanwhile, Indonesia is the second largest traditional rice export market of Vietnam, so measures need to be taken to protect the market and ensure export efficiency.

To maintain the reputation of Vietnamese rice brand in the world market, as well as maintain Vietnam's position in the Indonesian market, the Import-Export Department requested VFA to organize work with members who have won bids to enter the Indonesian market and report in detail to the Ministry of Industry and Trade on export activities and bidding status of enterprises.

According to the VFA leader, the price at which businesses sell rice is their own decision. However, for managers and for the entire industry, there are many stories to worry about. Because, just a few businesses offering low prices will drag down the entire base price of the entire rice industry. Importers use that as a reference price, and it is very difficult for other Vietnamese businesses to offer higher prices.

In fact, Vietnam's rice export price is at the lowest level among the world's major rice exporting countries.

The situation of selling at “big discounts” repeatedly will affect farmers’ income in the long run. More importantly, when we export rice, we are talking about the image of Vietnamese rice, the image of Vietnamese agricultural products, not just the rice of a certain rice enterprise. Therefore, offering rice at low prices not only affects the image of Vietnamese rice but also the image of Vietnamese agricultural products.