Stabilize the rice market

According to the Ministry of Agriculture and Environment, there should be no need to worry too much about the falling rice prices because the situation will return to normal when countries increase rice imports.

On March 7, in Can Tho City, Deputy Prime Minister Tran Hong Ha chaired a conference on rice production and market; drought and salinity prevention in the Mekong Delta. Attending the conference were leaders of many ministries, sectors, provinces and cities in the Mekong Delta, as well as associations and enterprises trading and exporting rice.

Farmers still make a profit

In the past 2 months, domestic rice purchasing prices have tended to decrease sharply compared to the last months of the year and the same period in 2024.

In the Mekong Delta, the price of fresh rice IR 50404 is currently only 5,400 - 5,500 VND/kg; OM 5451 is 5,600 - 5,800 VND/kg; Dai Thom 8, OM18 are purchased by traders at only 6,200 - 6,300 VND/kg; ST24 is priced at 8,200 - 8,300 VND/kg. Rice prices have decreased by about 2,200 - 2,700 VND/kg compared to the average price in 2024.

At the conference, Deputy Minister of Agriculture and Environment (MARD) Tran Thanh Nam said that rice prices decreased in the context that the sown area this year is expected to reach 7 million hectares - a decrease of 132,000 hectares compared to 2024.

Regarding rice, in the first two months of the year, the export volume was estimated at 1.1 million tons, up 5.9% but the value was only 613 million USD, down 13.6%. In the first days of March, the export price of rice continued to decrease sharply to 310 USD/ton for 100% broken rice; 5% broken rice was 393 USD/ton and 25% broken rice was 367 USD/ton. The Philippines, Ivory Coast and Ghana are the 3 major export markets of Vietnam.

According to Mr. Tran Thanh Nam, rice prices have decreased due to factors such as: increased world supply, creating pressure on the global market, while import demand from other countries has decreased and has not shown signs of recovery in the short term. In addition, India has ended its ban on rice exports and returned to the market with abundant output.

Minister of Agriculture and Environment Do Duc Duy said that the domestic rice price level is returning to the level of 2023 before there is a sudden change in 2024, including export prices. However, with the current export and domestic rice prices, there is no need to worry too much. Because with the price of IR 50404 rice at 5,400 - 5,500 VND/kg but the production cost is only 3,800 - 4,300 VND/kg as it is now, farmers still have a profit of about 30% or more.

According to Minister Do Duc Duy, the situation may return to normal after about 3 months, or in the middle or end of the second quarter of 2025, when the demand for rice imports is forecast to increase again. In addition, the US Department of Agriculture's assessment shows that this year, rice indicators will continue to increase in terms of production scale, demand and inventory.

Regarding farmers' concerns about the decrease in export rice prices leading to a decrease in paddy prices, Mr. Le Thanh Tung, Vice President of the Vietnam Rice Industry Association, said that this is normal and there is no need to worry too much. "The increase or decrease in prices is not due to a shortage or surplus of rice, but is simply a seasonal situation in the region. We have been monitoring and seeing that rice exporting enterprises in the first months of this year are still increasing their purchases," he informed.

Although rice prices have decreased this year, farmers still make a profit. Photo: Hoang Vu

Strengthening business support

Mr. Nguyen Ngoc Nam, Chairman of the Vietnam Food Association (VFA), said that the decrease in rice prices is due to the world trend. Notably, of the 1.1 million tons of rice exported in the past 2 months, high-quality rice accounted for 80%. Therefore, in this high-quality rice market segment, Vietnam does not compete much with India and Thailand.

"The important issue now is to remove difficulties for businesses, especially in terms of capital. Businesses are offering low prices because of short loan limits and terms, forcing them to sell to rotate capital and not having a source of money to buy reserves," Mr. Nguyen Ngoc Nam analyzed.

Mr. Tran Tan Duc, General Director of the Southern Food Company (Vinafood 2), gave an optimistic view when he said that the current rice price of 5,400 - 5,500 VND/kg has increased by 200 - 300 VND/kg compared to February.

Recently, Vinafood 2 negotiated with the Bangladesh Government to supply 100,000 tons of rice and share it among 157 VFA members. This has contributed to the increase in rice prices in recent days.

Mr. Duc suggested: "Winter-spring rice is the best quality rice crop of the year, so we should boldly buy and reserve it. If the summer-autumn crop encounters rain and there is no rice to export, businesses can use winter-spring rice reserves to supply orders."

Concluding the conference, Deputy Prime Minister Tran Hong Ha assessed that the recent policy response to the rice market developments has been timely. However, the provision of information to people and businesses about weather developments, production and export activities in the world market is still a weakness. However, forecasts and assessments of the world rice demand show good prospects for Vietnamese rice, which has its own brand and segment.

The Deputy Prime Minister said that farmers everywhere are facing great hardship and risks due to climate change, weather, etc. This story has been going on for a long time, so some solutions must be put forward immediately. In the immediate future, it is necessary to find a way for farmers to invest in production in a difficult market context, so that the state can provide support mechanisms and policies.

Regarding the recent sharp decline in rice prices, the Deputy Prime Minister requested the Ministry of Industry and Trade to check whether or not businesses have provided incorrect information to force down purchasing prices. The Ministry of Industry and Trade must urgently advise on amending and supplementing Decree 107/2018/ND-CP on rice trading and export to remove difficulties and obstacles for businesses.

Regarding the proposal on business loans, the Deputy Prime Minister requested the State Bank to support interest rates in the agricultural sector. In addition, the banking sector needs to have a policy of low-interest loans in the agricultural sector.

No adjustment of production and export plans

According to Minister of Agriculture and Environment Do Duc Duy, it is necessary to clarify why the price of Vietnamese rice has decreased more sharply than other countries. Is there unfair competition, dumping, traders going through many intermediaries to lower the price?

At a time when the Mekong Delta is harvesting the winter-spring rice crop, the Minister of Agriculture and Environment said that there should be short-term and long-term solutions to maintain and develop a sustainable market. Although we are facing difficulties, we should not be pessimistic to avoid importers forcing down prices.

In the short term, the Ministry of Agriculture and Environment recommends that localities in the Mekong Delta ensure production areas and output according to the set plan; adapt to climate change, natural disasters, and salinity. Minister Do Duc Duy affirmed that up to now, the Ministry of Agriculture and Environment has not considered adjusting the production and export plan for 2025.

Mr. Duong Duc Quang - Deputy General Director of Vietnam Stock Exchange (MXV):

Expected recovery of rice export prices

Importers from the Philippines are returning to buy because they believe that Vietnamese rice prices have hit rock bottom. In the medium and long term, when demand from import markets stabilizes again - especially from traditional partners such as the Philippines, Indonesia, Malaysia - along with Vietnamese enterprises improving production processes and product branding, the prospect of rice export prices being maintained or recovering is well-founded.

Currently, in the context of a sharp decline in rice export prices due to global oversupply, timely grasp of price developments and supply-demand trends will help businesses adjust their production-business and export plans appropriately.

Aiming at the goal of building a stable and sustainable rice industry in general and rice prices in particular, enterprises should cooperate with localities, cooperatives, and farming households to build high-quality production chains. The State and enterprises need to help farmers improve their knowledge, implement a more closely linked chain to overcome the situation of small-scale, fragmented production and transform production thinking into industrial economic thinking. Once the industry's input chain of high-quality production, stable rice output, and good quality, the entire rice industry, including processing and exporting enterprises, will also benefit and develop sustainably.

Mr. Nguyen Thai Viet Huy, Chairman of the Board of Directors of Saty Holding Investment Joint Stock Company:

Need to rethink the rice industry

Vietnamese rice is delicious but currently has the lowest price in the world because the capacity of enterprises is not enough to wait for the price to increase. Capacity including capital and facilities for storage are both weak, so when the price of rice is low, we have to "push the price" to sell.

In my opinion, we need to rethink the rice industry, diversify markets and process deeply, and produce only when there are orders. We also need to look back at the industry's goal of ensuring food security for the world, maintaining the goal of being the world's top exporter or profit for farmers. In addition, there needs to be a mechanism to encourage rice production models according to orders and output guarantees. Only then will farmers feel secure in growing rice.

L.Thuy - N.Anh recorded

Source: https://nld.com.vn/on-dinh-thi-truong-lua-gao-196250307232823731.htm