Current Situation:

In December 2023, the export price of Vietnamese rice reached a record high of $663 per ton for 5% broken white rice. However, by early February 2024, the price had dropped to around $638 per ton, though still the highest in the world, surpassing rice from Thailand and Pakistan. After the Lunar New Year holiday, the export price of rice fell sharply, reaching as low as $580 per ton at one point, below Thailand's price.

Reasons for Price Drop:

According to Mr. Phan Van Co, Marketing Director of Vrice Group, the decline in export rice prices is due to reduced demand while there is an abundant supply from both Vietnam and Thailand, especially during the winter-spring harvest. Major importers, knowing the harvest timings and quantities, are delaying purchases to wait for better prices. As a result, export orders have decreased, with only Indonesia and the Philippines buying in moderate quantities.

Situation of Stockpiling:

While exports are down, the domestic rice market is experiencing stockpiling. Traders who previously placed deposits to buy rice at high prices are now reluctant to sell at lower prices. They are hoping that prices will rise again, similar to 2023, to achieve higher profits. However, if export prices continue to fall, businesses may hesitate to purchase and process rice, leading to potential losses for both traders and businesses.

Forecast and Recommendations:

Mr. Nguyen Thanh Long, Director of Viet Rice Co., Ltd., notes that export orders and rice prices are decreasing, with 5% broken white rice currently priced under $600 per ton. Many traders are stockpiling with hopes of price increases, but if export prices continue to decline, businesses may struggle to purchase and process rice, impacting production and farmer income.

Experts advise abandoning the expectation of higher prices in 2024 due to significant global market fluctuations such as the El Niño climate phenomenon and geopolitical tensions. Instead of stockpiling, farmers and businesses should diversify markets and improve the quality of exported rice.

Mr. Do Ha Nam, Vice Chairman of the Vietnam Food Association, emphasizes that 2024 will bring unpredictable changes, and Vietnam needs to maintain and enhance the quality of its rice exports while expanding into new markets.

Impact of Indian Rice:

Mr. Phan Van Co warns that if India resumes normal rice exports, global rice prices might drop. India has a large stockpile of rice and can offer lower prices, potentially reducing demand for Vietnamese rice in markets such as the Middle East and Africa.

Source: Vietstock