Rice export prices expected to rebound soon due to limited supply

DNHN - The Vietnam Food Association (VFA) has forecasted that rice exports in 2025 will reach 7.5 million tons. The rice market is currently at its lowest point, but it is anticipated that importers will soon ramp up purchases, driving prices upward.

Diversifying products and expanding markets

According to the Import-Export Department under the Ministry of Industry and Trade, Vietnam achieved a record in rice exports in 2024, with 9.18 million tons shipped, generating $5.75 billion in revenue—the highest figure to date. Rice exports grew by 12% in volume and 23% in value. The average export price in 2024 reached $627 per ton (previously below $600 per ton), marking a 9% increase compared to 2023.

Since the beginning of 2025, Vietnam’s rice export prices have continuously declined, hitting their lowest level since September 2022. Notably, in the first 10 days of February 2025, export prices dropped sharply, causing significant concern among rice exporters.

Data from the Vietnam Commodity Exchange (MXV) indicates that the global rice market has just passed a slower trading period compared to the annual cycle. The reversal in domestic and export rice prices since late 2024 is attributed to oversupply in the market.

The latest report from the U.S. Department of Agriculture (USDA) forecasts global rice production for the 2024-2025 crop year to reach a record 532.66 million tons, nearly 10 million tons higher than the previous crop year.

While major importing countries such as Indonesia and the Philippines have temporarily halted, reduced, or delayed purchases to monitor price movements, rice production from major producing and exporting countries, particularly India, has surged. Rice output from the world’s top four suppliers—India, Vietnam, Thailand, and Pakistan—has increased compared to the previous crop year. India alone produced 145 million tons, up 7.2 million tons year-on-year, leading to a global oversupply. This has caused rice prices to plummet, ending the "golden era" for the industry.

Data from the Vietnam Food Association as of February 18 shows that Vietnam’s rice export prices remain below $400 per ton, lower than even the January 6 figures. Specifically, 5% broken rice is being offered at $395 per ton, 25% broken rice at $372 per ton, and 100% broken rice at $310 per ton.

In contrast, export prices for Thai and Indian rice mostly exceed $400 per ton. Thus, Vietnam’s rice export prices are the lowest among the top four exporters, which include India, Thailand, and Pakistan.

A supply-demand report on commodity rice for 2025 rice export management, prepared by the Ministry of Agriculture and Rural Development and submitted to the Ministry of Industry and Trade, estimates that the Mekong Delta region will produce 3.778 million hectares of rice this year, with an average yield of 63.4 quintals per hectare and total output reaching 23.965 million tons. Domestic consumption, including for seeds and animal feed, is projected at around 8.9 million tons. Commercial rice is estimated at 15.085 million tons, equivalent to 7.542 million tons of commercial rice for export.

Representatives from the Ministry of Agriculture and Rural Development emphasized the need for a professionalized management system for rice traders, requiring business registration and contracts between farmers and exporters regarding seed varieties, rice quality, and support policies for traders. The ministry also proposed that the Ministry of Industry and Trade enhance trade promotion to expand export markets, ensuring the full export of commercial rice while balancing the interests of producers and exporters.

Currently, Vietnam primarily exports rice to the Philippines, Indonesia, and China. However, for sustainable development, businesses need to expand into the EU, Japan, South Korea, and the Middle East—markets with high demand for quality rice. Additionally, there is a need to accelerate the development of drought- and salt-tolerant rice varieties to adapt to climate change and ensure stable production in the future. Diversifying products and markets is crucial for sustainable growth.

Rice exports in 2025 forecasted at 7.5 million tons

The Vietnam Food Association (VFA) has projected that rice exports in 2025 will reach 7.5 million tons. Many rice exporters are currently concerned as orders have significantly declined, with some companies reporting no signed contracts for February shipments.

According to the VFA, Vietnam is about to enter the winter-spring harvest—the largest crop of the year. Favorable weather conditions are expected to result in abundant yields, prompting many importers to temporarily halt purchases in anticipation of lower prices.

While the VFA acknowledges that rice prices are regulated by supply and demand, it notes that fragrant and high-quality rice still has its own market, with prices for these varieties remaining stable. Many businesses continue to export fragrant and specialty rice at $800–$1,200 per ton. Notably, contracts for ST25 specialty rice are being signed at over $1,000 per ton.

Although the price of ordinary export rice fell below $400 per ton in January 2025, the average export price for the month remained above $600 per ton, driven by fragrant and specialty rice.

Industry experts and businesses also note that the recent rice market has been a "psychological battle" between buyers and sellers. This struggle is expected to be short-term, given the substantial demand from importing countries.

The Philippines remains the world’s largest rice importer in 2025 and a key customer for Vietnam. On average, the Philippines imports 350,000 tons of rice monthly to meet domestic demand. Despite efforts to diversify supply sources from Thailand, Cambodia, and India, Vietnam continues to play a vital role. Another significant market is China, which sources its rice primarily from Thailand and Vietnam, not India.

A report from the Ministry of Agriculture and Rural Development to the Ministry of Industry and Trade estimates Vietnam’s total rice production in 2025 at 43.14 million tons, down 323,000 tons compared to 2024. The Mekong Delta is expected to produce 3.77 million hectares of rice, with an average yield of 63.4 quintals per hectare and output nearing 24 million tons. After deducting domestic consumption, seeds, and animal feed, commercial rice for export is estimated at 15.08 million tons, equivalent to 7.54 million tons of rice.

The Ministry of Agriculture and Rural Development has proposed that the Ministry of Industry and Trade boost rice exports during peak harvest months (February, March, April, July, August, and September) to avoid stockpiling. Additionally, the ministry recommends strengthening trade promotion and expanding markets to ensure the full export of commercial rice while balancing the interests of farmers and businesses.

Given these developments, rice export prices are expected to rebound soon. While they may not reach last year’s levels, prices for common 5% broken rice are projected to range between $435 and $450 per ton. Fragrant, high-quality, and specialty rice varieties are expected to continue selling well.

Amid global market fluctuations, Vietnam’s rice industry must promptly devise appropriate production and business strategies for 2025. Export efforts should focus on key markets such as the Philippines, Indonesia, and China, while also diversifying into potential markets like Europe, the U.S., the Middle East, West Asia, and Africa. Localities should prioritize producing high-quality rice varieties, such as fragrant and specialty rice, which are favored by the market.

Thu Huong