Vietnam fragrant rice price fall to one-month low on weak Philippine demand

Vietnam's fragrant rice prices fell to their lowest level in a month as demand from the Philippines weakened, reversing a two-month rally, multiple sources told Platts on May 28.

With the summer-autumn harvest expected to add fresh supply in the coming weeks, the combination of softer demand and increased availability could put further pressure on prices, according to market participants.

Platts assessed Vietnam Fragrant 5% rice at $494/mt FOB on May 28, down $2/mt day over day and $7/mt week over week, the lowest level since May 1, when the assessment was at $490/mt FOB.

The decline marks a reversal from a two-month rally when Platts Fragrant 5% rice prices had surged from a record low of $399/mt FOB on March 17 to a peak of $504/mt FOB on May 11, rising 26.3% over two months, supported by strong Philippine demand, tightening supply following the conclusion of the winter-spring harvest, and elevated production costs.

The Philippines, Vietnam's largest rice export destination, has recently stepped back from the market amid elevated prices and uncertainty surrounding import procedures, weighing on buying appetite.

Market participants said Philippine authorities have slowed the issuance of Sanitary and Phytosanitary import clearances, limiting import volumes and reducing spot buying activity.

In 2025, the Philippines imposed a series of import restrictions, including a temporary suspension from September through early 2026, followed by limited monthly import windows to balance supply needs and support domestic farmers during peak harvest periods.

A Philippines-based buyer said SPS permits are currently not being issued and the situation is expected to persist in the near term, adding that current offer levels are unsustainable without active Philippine participation.

"Price at $500/mt cannot be sustained by Vietnam without Philippine demand," the buyer said.

A Ho Chi Minh City-based exporter said domestic fragrant rice prices have declined since late last week, while fresh demand remains subdued as Philippine importers await clarity on import procedures.

According to market sources, local prices for fragrant 5% rice have declined by nearly Dong 300/kg (about $11.39/mt) from last week.

A Ho Chi Minh City-based trader said SPS issuance is expected to slow further in June.

"It seems the Philippine government will issue SPS more slowly and in smaller quantities in June," the trader said.

The subdued buying also follows the Philippine government's imposition of a retail price cap of Peso 50/kg on 5% broken imported rice under Executive Order No. 62, which took effect May 14 and was aimed at curbing unjustified price increases amid accelerating inflation.

According to a Singapore-based trader, the price cap has effectively lowered buyers' bid levels, as final retail costs after adding all associated costs leave importers with limited margins.

Vietnam exported 3.2 million metric tons of rice to the Philippines in 2025, down 24% year over year, according to Vietnam Customs data, making it Vietnam's largest export destination for rice.

The near-term price direction will largely depend on when Philippine buying resumes and at what volumes, as well as whether demand from other destinations emerges to absorb available Vietnamese supply.