The last barrier to rice exports has just been removed by the world's largest rice supplier - India. Will this affect Vietnamese rice prices?
India has completely returned to the export market.
Late on March 7 (local time), the Indian government officially lifted the ban on exporting 100% broken rice. The decision was made in response to record high inventories in early February 2025, nearly nine times higher than the government's target, as well as increasing international demand, and signaled a major shift in India's trade and food security strategy.
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| India removes 'barriers', will Vietnamese rice be affected? |
Resuming exports of 100% broken rice from India would allow poor African countries to secure supplies of the grain at lower prices, while also supporting Asian animal feed and ethanol producers that rely on the grain.
India had previously banned exports of 100% broken rice in September 2022. Then, in July 2023, the world’s largest rice supplier banned exports of non-basmati white rice to ensure stable domestic supply and prices. A month later, India imposed a 20% export tax on parboiled rice (rice obtained by soaking paddy in hot water or steaming and then drying). These moves pushed rice prices in Asia to a 15-year high in August 2023, from around $450 a tonne to a peak of $700 a tonne for 5% broken rice.
More than a year after the ban on non-basmati white rice exports and the imposition of a 20% export tax on parboiled rice, on September 28, 2024, the Indian Government suspended the ban on non-basmati white rice exports and reduced the export tax on brown rice and parboiled rice from 20% to 10%. The world rice market gradually entered a downward price cycle.
Accordingly, the sharpest decline was recorded from around the end of 2024 and the beginning of 2025 until now. In particular, 5% broken rice from Vietnam and Thailand has decreased from 38 - 45%. For Vietnam, the price of 5% broken rice has decreased from 680 - 700 USD/ton and has now dropped sharply to 390 - 400 USD/ton. This is an unprecedented large decrease.
India accounts for about 40% of the global rice trade and exports rice to about 150 countries. With the lifting of the ban on 100% broken rice exports on March 7, 2025, the Indian market has completely returned to the export market.
Industry experts say that along with the increasing world rice supply, the decreasing import demand and lack of signs of recovery in the short term will continue to put pressure on the global market.
Some opinions also said that even if India has not lifted the export ban, rice prices are expected to fall. The reason is that the global rice, wheat and corn markets are in a state of oversupply. At the same time, it is forecasted that in the next two years, the grain market will experience a period of oversupply and low prices.
Vietnamese rice does not compete directly with Indian rice.
Speaking to reporters from the Industry and Trade Newspaper, Mr. Do Ha Nam - Vice President of the Vietnam Food Association (VFA) - said that Indian rice varieties are different from those of Vietnam. Indian rice is mainly low-quality rice and is exported to African markets. Meanwhile, in Vietnam, most of the acreage has been converted by farmers to grow high-quality rice varieties and exported to key markets such as the Philippines, Indonesia and Malaysia.
“Domestic and export rice prices have been continuously decreasing since the beginning of 2025, making Vietnam one of the cheapest suppliers. However, 80% of exported rice is high-quality rice, which does not directly compete with 100% broken rice from India. However, pressure from India's large supply can still affect prices, especially in the low-grade rice segment,” said a VFA representative.
Previously, speaking to the press, Mr. Phung Duc Tien - Deputy Minister of Agriculture and Environment - also stated that Vietnamese rice is mainly exported to countries in the Asian region such as the Philippines, Indonesia, Malaysia, China, Singapore; meanwhile, Indian rice is mainly exported to countries in the African and Middle Eastern regions. It can be seen that the markets and export rice segments of Vietnam and India are very different.
Vietnam is entering the biggest rice harvest of the year – the winter-spring crop. Exporters believe that with India’s full return to the global rice market, Vietnamese rice will face fiercer competition. With abundant output thanks to favorable weather, rice prices are unlikely to return to $500 per ton. Exporters will also have to be more cautious in purchasing due to the constantly fluctuating market and slowing exports.
In response to developments in the rice market, the Ministry of Agriculture and Environment said it would direct localities in the Mekong Delta to ensure production output and acreage according to the set plan, focusing on producing and harvesting winter-spring rice on time; closely monitoring the crop calendar and the drought and salinity situation to limit impacts on rice production.
At the same time, continue to direct and coordinate with localities in implementing the Project on Developing 1 Million Hectares of High-Quality Rice in the Mekong Delta. Strengthen promotion, trade promotion, export promotion, research on import-export policies of other countries, create conditions to open markets for exporting Vietnamese rice and agricultural products internationally.
Ministries, sectors and localities should closely monitor market developments to have appropriate response solutions, coordinate with ministries, sectors and localities to closely monitor the world rice market; grasp the demand for rice in markets with room for growth such as the United States, EU, Africa... to have adjustments to production and export plans in line with market developments.
Regarding long-term solutions, the Ministry of Agriculture and Environment believes that it is necessary to research and organize production according to market demand and business orders. On the basis of general management of production, localities proactively adjust crop structure according to local characteristics to ensure favorable conditions for production and purchasing, processing, and exporting activities...
| According to a report by the Ministry of Agriculture and Environment, Vietnam's high-quality rice segment currently accounts for 80% of total export output and remains stable in price due to not competing much with Indian and Thai rice in the low-quality rice segment. |
Source: https://congthuong.vn/an-do-go-rao-gao-viet-co-chiu-tac-dong-377445.html
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