Vietnam rice price on top of the world

Vietnamese 5% broken rice has been the most expensive in the world since August last year, surpassing rivals Thailand and India, according to the Ministry of Industry and Trade.

In the first two months this year Vietnam’s average rice price was over $519 per ton. Since August last year, it has exceeded Thai prices by $15-27 and prices from India by $40-50.

Although Vietnamese export volumes dropped 20.9% year-on-year to $400,000 tons in January, prices rose 7% over the period.

Last year rice exports from Vietnam reached a 10-year high of 7.1 million tons.

The country plans to export 6.6 million tons of rice this year, with 4.12 million tons in total scheduled to be delivered by the end of the first six months.

Favorable export conditions are expected to return this year thanks to a resumption in demand from Indonesia and Bangladesh.

Buyers will increasingly turn to Vietnam for rice as India has banned the export of broken rice and put a 20% tax on white rice.

But the Ministry of Industry and Trade is concerned that the lack of diversification in export markets and dependence on China and the Philippines (the latter being the largest buyer of Vietnamese rice, accounting for 45% of exports) will be a challenge to the industry.

Low-priced rice from Pakistan may also present a challenge to holding market shares.

Input prices have been rising and logistics costs have remained high since the beginning of the Russia-Ukraine conflict.

The trade ministry is working with the E.U. to better introduce the import of Vietnam fragrant rice on the continent.