Vietnamese 5% white rice prices sink to 16-month low

Vietnamese 5% broken white rice prices have fallen to their lowest in 16 months amid strong regional competition, although despite the steep decline they still remain the highest in Asia.

Platts, part of S&P Global Commodity Insights, assessed Vietnamese 5% broken white rice at $499/mt FOB FCL on Nov. 21, down $30/mt on the month and $100/mt lower year on year, highlighting a downtrend in the country's rice market.

But Vietnam remains the least competitive market regionally with 5% broken WR of Pakistani origin assessed Nov. 21 at $452/mt FOB, Thai at $489/mt FOB, Indian at $450/mt FOB, and Myanmarese at $479/mt FOB FCL, Commodity Insights data shows.

"Vietnam's white rice prices are under pressure due to global competition, with other origins vying for market share," said a Vietnam-based exporter, noting the contrast to the market for fragrant rice varieties, where Vietnam faces little to no competition.

"While prices have softened, they haven't fallen drastically as demand remains low, apart from government contracts like those with Indonesia. Supply is tight until the next harvest in February or March, although some Cambodian paddy might be utilized in the interim. Most buyers have already secured their needs for the year, except possibly the Philippines," the exporter added, noting however that "prices could rise if demand picks up or locally, as many exporters are running short ahead of the new crop."

Echoing the bearish sentiment, a trader dealing in Vietnamese rice said that "with white rice prices in Vietnam falling, the bearish market will put stakeholders in challenging situations." He added that he expected prices to drop further as the winter-spring harvest begins.

"I'm curious to see how Vietnam opens in January and February after the harvest. Import volumes for rice like Swarna from India are likely to increase, as Vietnamese buyers primarily use it as raw material for noodles," the trader said.

India's return to international trade following the lifting of its export ban has been one challenging factor for the Vietnamese rice sector.

"The recent decline in Vietnamese white rice prices can be attributed to the opening created by the removal of India's rice export ban," said a Singapore-based trader who deals in Vietnamese rice. "On the demand side, Bulog still has pending contracts with Vietnam, and there's some inquiry from Malaysia. However, on the supply side, there isn't much availability as it's the end of the season, with limited supplies of the summer/autumn crop. The next crop, the winter-spring crop, the largest crop in Vietnam, will arrive between February and April."

Market participants agreed that Vietnam cannot compete with India's cheaper rice varieties and thus the number of buyers has dwindled to a select few.

"Vietnam is hardly shipping white rice anymore. Expensive Vietnamese white rice won't sell with India back in the market. They [Vietnamese sellers] are mostly selling to Bulog and Bernas. Crop arrivals in Vietnam will pick up in February, which should soften prices. Importing rice into Vietnam has become a regular affair as the country's production has shifted significantly toward fragrant rice, creating a need to import white rice," said a Thailand-based trader.

Some traders expect the price slump to continue in the coming weeks amid the impending winter harvest.

"With white rice prices in Vietnam falling, the bearish market will put stakeholders in challenging situations. Prices are expected to drop further as the winter-spring harvest begins. I'm curious to see how Vietnam opens in January and February after the harvest. Import volumes for rice like Swarna from India are likely to increase, as Vietnamese buyers primarily use it as raw material for noodles," said a trader dealing in Vietnamese rice.

With forecasts of record import volumes, Vietnamese rice exports are likely to remain under pressure until next year.

The US Department of Agriculture projected Vietnam's rice imports in the marketing year 2024-25 (January-December 2025) at 3.10 million mt, an all-time high, making it the second-largest importer in the world after the Philippines.