Bui Thi Thanh Tam, chair of Vinafood 1’s board of members, has confirmed that Vietnamese rice exporters have won the bid to provide 400,000 tons of rice to Indonesia out of the 500,000 tons the country wants to buy.

Indonesia is the second largest rice consumer of Vietnam’s rice. The rice prices in Indonesia are increasing sharply because of shortages. As of February 2024, the country had experienced a rice shortage for the eighth consecutive month. The government of Indonesia has had to increase the amount of rice it plans to import in 2024 by 1.6 million tons to 3.6 million tons.

El Nino has had negative impact on rice production, and India still maintains its non-basmati white rice export ban. 

Nguyen Van Don, general director of Viet Hung Co Ltd, said Vietnam’s large partners, including the Philippines, Indonesia and China, have announced their plans to increase imports this year.

However, Vietnam’s rice export prices are no longer as high as they were in the last half a year. According to the Vietnam Food Association (VFA), the rice price of different kinds have decreased sharply since February.

On March 5, Vietnam’s five percent broken rice price was traded at $579 per ton, or $84 lower than the peak of $663. The price was just $46 per ton higher than that on July 19, 2023, before ‘rice fever’ occurred all over the globe.

Vietnam’s five percent broken rice, after a long period of standing as the most expensive in the world, has become cheaper than Thai and Pakistani rice by $34 and $20 per ton, respectively.

Vietnam’s 25 percent broken rice export price has also dropped to $557 per ton, or $4-5 per ton lower than Thai rice of the same kind.

The rice export price slide has forced domestic prices down since mid-January 2024, from VND9,000 to VND7,300-7,800 per kilogram.

The sharp fall in rice prices is contrary to predictions given by economists, who affirmed that the rice prices would keep escalating because of the short supply in the globe.

Explaining the decreases, Don said Vietnam is now in the high harvest season and the supply is abundant. Tam from Vinafood 1 agreed.

Thailand, the Philippines and Indonesia will also harvest rice from March to May.

Meanwhile, importers are not signing contracts at this moment.

“They understand Vietnam’s rice production schedule and they are waiting for prices to go down,” Don said. Vietnamese exporters also are waiting. 

Tam An