Will rising rice prices provide a boost to the rice industry?

In recent days, perhaps the best news for rice farmers in the province has been the record-high price of rice, exceeding 9,500 VND/kg. On average, rice farmers are making a profit of about 30 million VND/ha after deducting expenses. Across the fields, farmers have been harvesting and drying their rice in preparation for the next planting season.

Rice prices hit record highs.

In the two northern districts of Tuy Phong and Bac Binh, farmers are busy in the fields harvesting and drying rice these days. The intense morning sun shines through the golden rice fields, seemingly encouraging a smooth harvest. In Tuy Phong district, farmers have basically finished harvesting the main rice crop on over 2,000 hectares, primarily using ML48 and Dai Thom 8 varieties, with an average yield of 6 tons/ha. Encouragingly, during this harvest season, the rice market is unusually vibrant, with prices around 9,600 VND/kg.

At this time, rice farmers in Bac Binh district are also beginning the peak harvest season for their main rice crop. Meeting Mr. Binh Van Viet, a rice farmer in Phan Thanh commune, we learned that his family cultivates 1.5 hectares of rice in the Moi field. Although harvesting is underway, Mr. Viet estimates that the yield this season will be around 5 tons per hectare. With the current high selling price, he estimates a profit of approximately 50 million VND after deducting investment costs.

This farmer further shared that this year's harvest is more favorable than the same period last year, partly due to the high price of rice, while the prices of fertilizers and pesticides, although still high, have decreased and stabilized compared to last year, helping farmers reduce input costs. However, rice growers in Bac Binh district also expressed concern that in the summer rice crop, some areas of their family's rice, and that of other households in particular, have been damaged by stem borers and mixed rice varieties, affecting yield and quality. Therefore, they hope that the current rice price will remain stable to increase income and reinvest in the upcoming winter-spring crop.

Sustainability is needed.

According to the Department of Agriculture and Rural Development, the weather in the province's crop production in 2023 was quite favorable. Water levels in reservoirs and dams ensured production, and the planted area for various crops was relatively high compared to the plan. However, at the end of the summer-autumn crop and the beginning of the main crop season in 2023, prolonged heavy rains caused localized flooding in some fields, reducing yields. This also affected the planting time for the main crop season, resulting in a delay of approximately 20 days compared to the planned schedule. Furthermore, the pest and disease situation on crops continued to be unfavorable, with many potential outbreaks, such as brown planthopper infestations on rice. Although production linkages have been implemented, the results are still limited and not truly stable, failing to create momentum for the development of commodity-oriented production that meets market demands.

*Farmers visit a model of integrated rice farming.*

Notably, amidst fluctuating market prices, the surge in rice prices has delighted farmers, suggesting a resurgence in Vietnam's rice industry. However, rice businesses are currently worried about previously signed export orders at lower prices, as they will have to purchase at higher prices to fulfill existing stockpiles, potentially leading to losses. This is especially concerning given the stable prices previously maintained by domestic rice procurement chains, particularly in Binh Thuan (such as Loc Troi Group). The current unexpected price increase raises concerns about the potential impact on these linkages, as farmers see higher profits from market prices, while the stable but lower prices offered by these linkages are lower than market prices. Therefore, ensuring a balance of interests between farmers and businesses requires careful consideration from all parties, avoiding the kind of "breach of contract" seen in many current agricultural product linkages.

According to the provincial agricultural sector, Binh Thuan is currently encouraging capable businesses to collaborate in developing concentrated rice seed production areas. Simultaneously, a plan has been developed to create concentrated, high-quality commercial rice production areas. The aim is to build a high-quality rice value chain and specialty rice with the province's brand in key rice-producing areas in Duc Linh, Tanh Linh, Ham Thuan Bac, and Bac Binh districts.

The ups and downs of agricultural product prices in general, and rice prices in particular, continue unabated. However, with rice prices currently at record highs in many years, is there a possibility of a boost for the rice industry?

According to the Department of Agriculture and Rural Development, the total area planted with annual crops in the province for the 2023 crop season is estimated at approximately 56,011 hectares, including 44,764 hectares of food crops (40,391 hectares of rice and 4,373 hectares of corn), with an estimated food production of 246,500 tons (220,131 tons of rice and 26,369 tons of corn).

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