Export rice prices plummet

Records in the Mekong Delta provinces show that the average price of rice at the field is 7,200-8,000 VND per kg. This level is down 10-12% compared to the end of last year. For example, in An Giang, IR 504 rice is currently 7,200-7,350 VND per kg; Japanese rice is 7,800-8,000 VND.

Mr. Nguyen Van Thuan (Kien Giang) said he is preparing to harvest nearly one hectare of Japanese winter-spring rice. Before Tet, traders paid a deposit of VND9,000 per kilogram but now only agree to pay VND8,000 due to the market downturn.

Similarly, Mr. Nam in Tien Giang could only sell rice for 7,700 VND, 10% lower than the deposit traders had made before Tet.

Ms. Huynh Thi Bich Huyen, Director of Ngoc Quang Phat Import-Export Joint Stock Company - a rice purchasing unit in the West - said that the company buys 1,000-2,000 tons of winter-spring rice every day. The purchased output is 3 times higher than last year's autumn-winter crop, but the price is 12% lower, the highest being 8,000 VND per kg.

According to statistics from the Vietnam Food Association, since the beginning of the year, rice prices have dropped by VND1,000-1,300 per kilogram. Rice prices in warehouses have also dropped by VND1,200-1,800, causing export rice prices to adjust accordingly.

Currently, Vietnam's 5% broken rice export price is 594 USD per ton on February 29, down 6 USD per ton compared to the previous day. At this level, Vietnamese rice is 12-15 USD per ton lower than Pakistan and Thailand, respectively. Similarly, 25% and 100% broken rice are 570 USD and 498 USD per ton.

The reason why the price of exported rice plummeted, According to Ms. Huyen, domestic supply is abundant but new import orders are slow. Countries importing rice from Vietnam have not signed new contracts.

In addition, large domestic exporters have been continuously losing money because rice prices have remained high for a long time. This has forced them to adjust their purchasing prices to a suitable level.

Meanwhile, Mr. Dinh Ngoc Tam, Deputy General Director of Co May Company Limited, said rice is returning to its true value and market demand after a period of sudden increase.

According to him, at 7,200-8,500 VND per kg, farmers have made a profit. On average, farmers make a profit of 3,000-4,000 VND per kg of rice (depending on the variety).

On the other hand, Vietnamese rice also has to compete with rivals in traditional export markets such as Indonesia and the Philippines. Thailand is looking to increase production and export market share to the Philippines to compete with Vietnamese rice.

"Policy changes, fluctuations in supply and demand and price trends in consuming countries will directly affect the Vietnamese rice industry," said Mr. Vu Ba Phu, Director of the Trade Promotion Department (Ministry of Industry and Trade).

According to Director of the Department of Crop Production Nguyen Nhu Cuong, this year's winter-spring crop in the Mekong Delta has been planted on nearly 1.5 million hectares. So far, farmers have harvested over 300,000 hectares. The winter-spring crop is expected to yield high yields, so the supply is abundant, ensuring the domestic and export markets.

"Exports this year are still quite favorable as world supply is still limited. Prices will remain around 570-600 USD per ton and will hardly decrease further, unless India reopens rice exports," Mr. Cuong predicted.

However, the Ministry of Industry and Trade recommends that export enterprises need to diversify products, proactively seek partners and have a strategy for brand building and methodical promotion.

As with Indonesia, the number of traders with import licenses in this country is very limited, making it difficult to find partners. Therefore, businesses need to ensure quality and delivery time according to contracts signed with traders here.