Rice prices drop sharply, Ministry of Industry and Trade proposes a series of solutions

In its role as a state management agency, the Ministry of Industry and Trade will intensify the implementation of trade promotion solutions to boost rice exports in the coming period.

Rice prices continue to fall sharply.

According to the Import-Export Department (Ministry of Industry and Trade), in 2024 Vietnam achieved a record rice export volume of 9.18 million tons, worth 5.75 billion USD, the highest figure ever. Rice exports grew by 12% in volume and 23% in value. In terms of unit price, in 2024 Vietnam achieved an average export price of 627 USD/ton (previously below 600 USD/ton), an increase of 9% compared to last year.

In 2024, Vietnam achieved a record rice export of 18 million tons, generating $5.75 billion in revenue. (Image: Illustration)

However, over the past two weeks, domestic and export rice prices have been at their lowest levels in two years, while the biggest rice harvest of the year – the Winter-Spring crop – has just begun, causing concern among many farmers. According to the Vietnam Food Association, 5% broken rice has fallen by a total of $25, to only $473 per ton, the lowest level in about two years.

With the price of IR 50404 paddy (for producing 5% broken rice) at just over 6,000 VND/kg, OM 5451 seed rice at around 6,500 VND/kg, and fragrant rice at around 7,000 VND/kg, the lowest in the past two years.

According to rice exporting businesses, many of Vietnam's key export rice products, such as OM 5451, which previously sold for $640-650 per ton, will only fetch around $560 per ton by the end of 2024 and are currently priced at around $540 per ton. Similarly, DT8 rice, which previously sold for $660-670 per ton, will decrease to $570 per ton by the end of 2024 and is currently around $550 per ton.

The decrease in rice prices is attributed to the early harvest of Vietnam's winter-spring crop, leading to increased supply. Important import markets for Vietnam, such as the Philippines, Indonesia, and China, have also shown no signs of re-entering the market.

On the other hand, not only have Vietnamese rice prices fallen, but Indian rice prices, from the world's leading rice exporter, have also declined for the third consecutive week to their lowest level in 17 months. Accordingly, Indian parboiled rice with 5% broken grains was offered at $436-$442 per ton this week, down from $439-$445 per ton last week. Indian white rice with 5% broken grains was offered at $440-$449 per ton.

Meanwhile, Thai 5% broken rice was offered at $490-$502 per ton, showing little change from last week's $502 per ton. This week, demand remained weak and supply was unchanged.

Traders in Thailand say the market is anticipating a decline in Thai rice exports this year due to increased Indian exports. Some traders in Thailand predict Thai rice exports could fall by around 30% as India begins exporting more rice in 2025. Weak demand could lead to further price drops.

With Vietnamese and other countries' rice prices continuously falling, importers are hesitant and waiting to see what happens. While the market is sluggish, some sellers, eager to sell quickly, are lowering prices to increase supply. As rice prices fall further, the market increasingly desires even better prices.

The Ministry of Industry and Trade is focusing on solutions and accelerating the removal of bottlenecks.

The issue of rice prices was also a hot topic at the Ministry of Industry and Trade's regular quarterly press conference for the fourth quarter of 2024, held on the afternoon of January 7th. Responding to reporters and the press on this issue, Mr. Tran Thanh Hai, Deputy Director of the Import-Export Department (Ministry of Industry and Trade), stated that rice prices are falling in line with global trends, as India is "dumping" its rice stocks after lifting its export ban and removing export taxes. Abundant global rice production will impact world rice prices, affecting countries like Thailand and Pakistan, not just Vietnam.

Mr. Tran Thanh Hai, Deputy Director of the Import-Export Department (Ministry of Industry and Trade), shared this information at the Ministry of Industry and Trade's regular press conference for the fourth quarter of 2024, held on the afternoon of January 7th.

"Rice prices can't keep rising forever; once they reach their peak, they have to fall. Export rice prices, like stocks, fluctuate, sometimes rising, sometimes falling. This is perfectly normal," Mr. Hai said.

However, Vietnamese rice has already established a brand and has established trading partners. Furthermore, Vietnamese businesses have focused on improving rice quality, building strong rice brands, and securing new export markets. Therefore, the winter-spring rice crop (which many localities have already started sowing) will eventually find a market.

In the current context, Mr. Tran Thanh Hai believes that businesses and rice producers need support from many sides. For example, banks should provide loans to increase rice stockpiling while prices are low, helping to stabilize the domestic market. Or the finance sector should quickly complete VAT refund procedures so that businesses can have the conditions to rotate capital.

Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan shared this at the Ministry of Industry and Trade's regular press conference held on the afternoon of January 7th.

Regarding this, Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan said that at the beginning of 2025, the Government issued Decree 01 amending Decree 107 dated August 15, 2018 on rice export business. In which, the Government proposed many solutions for clearer and more transparent management of rice export to ensure food security and maintain export momentum.

One of the key points of the Decree, effective from March 1st, is the regulation of the responsibilities of rice export businesses. According to Decree 107, rice export businesses were required to report to the Ministry of Industry and Trade every Thursday on the actual quantity of paddy and rice in stock for each specific type. However, under Decree 01, businesses are allowed to postpone the reporting period, submitting it before the 5th of each month.

In addition to the document sent to the Ministry of Industry and Trade for guidance and management, businesses must also send copies to the Department of Industry and Trade in the province where the business has its head office, warehouse, milling or processing facility for paddy and rice, and also to the Vietnam Food Association.

"As the state management agency, the Ministry of Industry and Trade is committed to promoting solutions to boost rice exports in order to quickly resolve the bottlenecks for this commodity," Deputy Minister Nguyen Sinh Nhat Tan shared.

Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan stated:

In early 2025, the Government issued Decree No. 01/2025/ND-CP amending and supplementing several articles of Decree No. 107/2018/ND-CP dated August 15, 2018, on rice export business. This included adding cases where the Certificate of Eligibility for Rice Export Business can be revoked and supplementing regulations on the responsibilities of rice exporters.

Developing clearer and more coherent management solutions for rice exports will contribute to ensuring domestic food security. Simultaneously, regulating rice prices, ensuring rice quality, and especially building rice brands are key solutions to boost rice exports in the coming period.

Source: https://congthuong.vn/gia-gao-giam-sau-bo-cong-thuong-de-xuat-hang-loat-giai-phap-368473.html