Vietnamese 5% white rice prices sink to over 20-month low due to weak demand

Vietnamese 5% broken white rice prices slumped to a more than 20-month low on Dec. 31, hurt by weak demand, anticipation of higher supplies at the start of 2025 and competition from countries such as India.

Platts, part of S&P Global Commodity Insights, assessed the Vietnamese 5% broken white rice price at $472/mt FOB on Dec. 31, down $27/mt month over month and $168/mt year over year. The price was the lowest since $455/mt FOB on April 18, 2023.

Vietnamese rice farmers are bracing for lower prices as Indonesia plans to lower rice imports and enhance domestic production in 2025. Supplies are expected to rise after the start of the winter/spring harvest in February and competition from India has intensified, with the country scrapping its minimum export price for non-basmati white rice in October and lifting its ban on non-basmati rice exports.

Despite the steep decline, Vietnamese 5% broken white rice prices remain higher than Indian and Pakistani rice.

Platts assessed Indian-origin 5% broken rice at $444/mt FOB on Dec. 31 and Pakistani-origin 5% broken rice at $445/mt FOB. Myanmar 5% broken rice was assessed at $474/mt FOB FCL and Thai at $494/mt FOB.

"With the initial harvests, prices are likely to soften compared to current levels due to increased supply, particularly for white rice, which will face competition from other origins like India and Thailand," a Vietnam-based trader said.

Demand for Vietnamese rice is expected to recover and remain competitive once the main winter/spring harvest begins in February, the trader said, adding that export activity from both government and private buyers is anticipated to resume as usual.

Fragrant rice demand is expected to be influenced by buying interest from markets such as the Philippines and Africa. However, consumption is expected to remain steady, as this crop typically sees high demand due to its superior quality compared with other harvests.

"In the short term, Vietnamese rice prices are likely to drop sharply," a Vietnamese exporter said. "Current prices are [impacted] by sellers eager to offload stock from the autumn/winter season that was purchased at higher prices, or by those struggling to ship their inventory under current market conditions."

Between January and November, Vietnam exported 8.45 million mt of rice, rising 10.6% year over year, according to the General Department of Customs. Vietnam exported mainly to the Philippines, Indonesia and Malaysia.

The US Department of Agriculture projects Vietnam's rice exports in the 2024-25 marketing year (January-December 2025) at 7.8 million mt, making it the second-biggest exporter in the world after India.