Data from the Vietnam Food Association shows that paddy prices have decreased by 40-50% year-on-year to VND5,400-9,500 (US$0.2-0.37) per kilogram, depending on the variety.
Meanwhile, the export price of Vietnam’s 5% broken rice was at $395 per ton on Feb. 14, the lowest among the top four rice exporters, which also include India, Thailand, and Pakistan.
This represents the lowest price in the last nine years and a 40% drop from the $663 peak seen in November 2023.
However, various types of rice in HCMC are still selling at last year’s peak prices, ranging from VND17,000 to VND24,000 per kilogram. In Hanoi, prices range from VND19,000 to VND30,000 per kilogram.
Hoang, owner of a rice store in HCMC’s Go Vap District, explained that retail prices have not been lowered because wholesalers like him had stocked up when prices were high.
“Once the old stock is sold and new shipments come in at lower prices, retail prices will gradually decrease,” he said.
Phan Thanh Trung, a rice wholesaler in HCMC’s Tan Binh District, added that rising costs, such as transport, storage and labor, have also made it difficult for prices to drop quickly.
“Spoilage during storage is also a factor that prompts retailers to keep prices steady,” he noted.
Supermarket chains usually sign long-term contracts with their suppliers, so they have also yet to lower prices.
Vietnam exported a record 9 million tons of rice last year, driven by India’s rice export ban. However, with the ban now lifted, global supply has surged, driving prices down.
Meanwhile, Indonesia, Vietnam’s second-largest rice export market, bolstered its efforts to achieve food self-sufficiency, reducing imports to a trickle.
Shipment to Indonesia amounted to only 651 tons in January, down 98% from a year earlier, according to the General Department of Customs.
The Philippines, another large market, also scaled back purchases due to abundant stockpiles.
The U.S. Department of Agriculture expects global rice supply in 2024-25 to rise to a peak of 527.6 million tons, primarily due to increased production in India and China.
It expects consumption of 526.4 million tons and exports of 56.3 million tons.
The World Bank forecasts that prices could decline further in the first half of this year before stabilizing by year-end, posing challenges for top exporters like Vietnam.
Amid potential oversupply, Vietnam’s Ministry of Agriculture and Rural Development plans to cut the rice production area to 7 million hectares, down 132,000 hectares from 2024.
Rice output is expected to drop by about 357,000 tons to 43.14 million tons, while exports could fall sharply to 7.5 million tons from last year’s record 9 million.
