Philippines' rice import cut to pressure Vietnam’s market amid oversupply

The Philippines' planned cut in rice imports next year is expected to weigh more heavily on Vietnam's rice market than Thailand's, as Hanoi faces oversupply risks while Bangkok braces mainly for short-term price volatility, market participants told Platts Dec. 16.

The move matters because the Philippines is the world's largest rice importer, and tighter import volumes, higher tariffs and a push to diversify sourcing away from Vietnam could reshape regional trade flows and pricing dynamics heading into early 2026.

The Philippines Department of Agriculture expects the volume of rice imports in 2026 to fall below 4 million metric tons as domestic production is projected to hit a new record, it said in an official release Dec. 16.

The release quoted Agriculture Secretary Francisco P. Tiu Laurel Jr. as saying that "import volumes next year will likely range between 3.6 million and 3.8 million metric tons—sufficient to meet national demand without depressing farmgate prices."

The policy includes a planned increase in rice import tariffs to 20% from 15% once importation resumes.

Tiu Laurel also urged importers to diversify sourcing. "Instead of relying almost entirely on Vietnam, we encourage importers to consider Cambodia, Myanmar, and other non-traditional suppliers," he said.

The Southeast Asian nation suspended rice imports for 60 days starting Sept. 1 to support domestic farmers during the harvest season, before extending the suspension until April 2026, with a limited January import window of around 300,000 mt.

Vietnam faces oversupply risks

Vietnam is expected to bear the brunt of the Philippines' policy shift, given the dominant share of the Philippines' rice imports.

Philippine rice imports from Vietnam decreased 24.9% year over year to 3 million mt over January-November, according to Vietnam Customs data.

A Ho Chi Minh City-based industry source said that if the Philippines reduces its import volumes, "Vietnam would be the most affected," with prices likely to come under pressure during the winter-spring crop due to oversupply.

"With the Philippines reducing imports, the market is expected to see a surplus of OM 5451 rice and fragrant rice," the source said, adding that exporters would need to redirect shipments to alternative markets such as Africa and China.

"Given Vietnam's large share, a reduction in total Philippines imports combined with the government's push to diversify sourcing away from Vietnam, is likely to have a meaningful impact on Vietnamese rice prices, particularly in early 2026 when the winter-spring crop enters the market," said Tram Nguyen, export lead at Rize.

"During the nearly four-month import suspension, Vietnamese exporters have already begun redirecting sales to alternative markets," Tram said, adding that competition is expected to intensify sharply in large replacement markets such as China and Africa.

"Philippines importers are likely to pass part of the additional cost [increase in tariffs to 20%] back to Vietnamese exporters," she added, citing softer year-on-year demand and stronger competition from Thailand, India and Pakistan.

Some exporters expect longer-term adjustments if weaker Philippine demand persists.

"Vietnam is likely to adjust planting in 2026 to better reflect demand and supply conditions," said another Ho Chi Minh City-based exporter.

Platts assessed Vietnamese 5% white rice at $359/mt FOB Dec. 16, unchanged week over week, while Thai 5% WR at $394/mt FOB, down $5/mt week over week.

Limited downside for Thailand

Thai market participants said the policy shift is unlikely to materially pressure Thailand's domestic prices, given the country's relatively small exposure to the Philippine market.

"From my perspective, the Philippine market should not have a significant impact on the Thai rice market," said Wanniwat Kitireanglarp, deputy secretary general of the Thai Rice Exporters Association.

"Historically, the Philippines has imported only around 150,000 to 350,000 metric tons of rice per year from Thailand, and at most around 450,000 tons annually," he said. "Even in a more extreme scenario where imports fall by 50%, this would translate to no more than 150,000 tons per year, which is not large enough to create additional pressure on Thailand's domestic rice prices."

Wanniwat said that if import permits are issued quickly and shipments proceed urgently in January, Thai white rice 5% prices could see short-term upward pressure as exporters rush to cover forward sales.

"However, if the Philippine government decides to restrict imports or impose country-specific quotas that affect shipments in January, then I would expect Thai white rice 5% prices to stop rising and potentially adjust downward instead," he said.

Another Bangkok-based exporter said, "The Thai market is quite diversified, and the Philippines is not our main one. There is space for Thai rice in the Philippines if our prices are in line with other countries."

Regional rice prices will likely hinge on the Philippines' January import window and Vietnam's winter-spring harvest arrivals.