Vietnam Fragrant rice prices fall to near 3-year low amid Philippine import ban

Vietnam's Fragrant rice prices have plunged to their lowest level in nearly three years, pressured by weak export demand resulting from a 60-day import suspension imposed by the Philippines.

Vietnamese rice exporters face significant implications from the ban, as the Philippines is the world's largest rice importer and the biggest buyer of Vietnamese rice.

Platts, part of S&P Global Energy, assessed Fragrant 5% rice at $439/mt FOB on Sept. 4, down $63/mt month over month, and at the lowest since Sept. 28, 2022, when the price was assessed at $437/mt FOB.

In early August, the Philippines decided to suspend rice imports for 60 days starting Sept. 1 to support domestic farmers impacted by falling prices during the harvest season.

The ban does not apply to imported milled rice covered by a valid sanitary and phytosanitary import clearance, provided it is shipped via bulk carrier, departs the country of origin on or before Aug. 30 and arrives at authorized ports of entry on or before Sept. 15, according to a memorandum from the Philippines' Bureau of Plant Industry dated Aug. 14.

For containerized shipments, the ban is not applicable to imports with a bill of lading dated on or before Aug. 25 and arrival by Sept. 15 at designated ports: Manila, Davao, Cagayan de Oro and Cebu.

A Philippines-based importer said: "Our stocks are already arriving. We booked enough ahead of the ban, but now we will have to adjust our position in line with these new policies."

Price recovery

Some Vietnamese exporters anticipate a price recovery as the harvest season concludes.

"Prices have dropped significantly. In my view, they are now at the bottom and should recover in September after the harvest is completed, especially in October when demand from the Philippines returns," said a Vietnam-based exporter.

The timing of the ban coincides with Vietnam's summer/autumn crop nearing completion, which could limit price declines.

According to market participants, more than 90% of the summer/autumn crop has been harvested in Vietnam.

"I think prices have already reached a bottom, as the summer-autumn crop is almost finished. Philippine buyers are trying to purchase now at cheaper levels for November shipments," said another exporter.

A market source said Fragrant rice prices were unlikely to fall further, given the advanced stage of the harvest, which has left only limited volumes of lower-quality paddy available.

The source expects prices for the DT8 variety to remain stable unless the Philippines makes sudden policy changes.

Market sources said Fragrant rice prices will largely depend on how quickly demand from the Philippines resumes after the import ban, as well as whether alternative markets are able to absorb the Vietnamese rice supply.