Rice prices drop sharply, Ministry of Industry and Trade proposes a series of solutions

In its role as state manager, in the coming time, the Ministry of Industry and Trade will step up the implementation of trade promotion solutions to boost rice exports.

Rice prices continue to fall sharply

According to the Import-Export Department (Ministry of Industry and Trade), in 2024, our country will achieve a record in rice exports with 9.18 million tons, worth 5.75 billion USD, the highest figure ever. Rice exports will grow by 12% in volume and 23% in value. In terms of unit price, in 2024, our country will reach an average export unit price of 627 USD/ton (previously under 600 USD/ton), an increase of 9% compared to last year.

In 2024, our country will achieve a record in rice export with 18 million tons, turnover of 5.75 billion USD. (Photo: Illustration)

However, in the past two weeks, domestic and export rice prices have been at their lowest level in the past two years, while the biggest rice harvest of the year - the Winter-Spring crop - has just begun, causing many farmers to worry. According to the Vietnam Food Association, 5% broken rice has dropped a total of 25 USD, to only 473 USD/ton, the lowest level in the past two years.

With the price of IR 50404 raw rice (to produce 5% broken rice) remaining at just over 6,000 VND/kg, OM 5451 rice variety is around 6,500 VND/kg and fragrant rice is around 7,000 VND/kg, the lowest in the past 2 years.

According to rice exporting enterprises, many of Vietnam's main export rice products such as OM 5451, which was previously priced at 640 - 650 USD/ton, by the end of 2024 was only around 560 USD/ton and is currently around 540 USD/ton. Similarly, DT8 rice, which was previously priced at 660 - 670 USD/ton, by the end of 2024 was reduced to 570 USD/ton and is currently around 550 USD/ton.

The decrease in rice prices is explained by the fact that Vietnam’s early winter-spring crop has begun to be harvested, leading to an increase in supply. Vietnam’s important import markets such as the Philippines, Indonesia and China have not shown any signs of entering the market.

On the other hand, not only Vietnam's rice prices have fallen, the prices of India, the world's leading rice exporter, have fallen for the third consecutive week to a 17-month low. Accordingly, India's 5% broken parboiled rice was offered at $436-$442 per tonne this week, down from $439-$445 per tonne last week. India's 5% broken white rice was offered at $440-$449 per tonne.

Meanwhile, Thailand's 5% broken rice was quoted at $490-$502 a tonne, little changed from last week's $502. Demand remained weak and supplies remained unchanged this week.

Traders in Thailand said the market is expecting Thai rice exports to fall this year as India increases exports. Some traders in Thailand said Thai rice exports could fall by about 30% when India starts exporting more rice in 2025. Weak demand could push prices down further.

The continuous decrease in rice prices in Vietnam and other countries has made importers hesitate and wait. While the market is empty of buyers, some sellers are impatient to sell quickly, so they reduce prices to increase supply. As rice prices decrease, the market wants even better prices.

Ministry of Industry and Trade focuses on solutions, accelerates the removal of bottlenecks

The issue of rice prices also heated up at the regular press conference for the fourth quarter of 2024 of the Ministry of Industry and Trade held on the afternoon of January 7. Responding to reporters and the press on this issue, Mr. Tran Thanh Hai - Deputy Director of the Import-Export Department (Ministry of Industry and Trade) - said that rice prices decreased following the world trend in the context of India "dumping goods" after lifting the ban on rice exports as well as removing export taxes. Abundant world rice production will affect world rice prices, including countries like Thailand and Pakistan, not just Vietnam.

Mr. Tran Thanh Hai - Deputy Director of the Import-Export Department (Ministry of Industry and Trade) - shared at the regular press conference of the fourth quarter of 2024 of the Ministry of Industry and Trade held on the afternoon of January 7.

“Rice prices cannot increase forever. Once they reach their peak, they will have to decrease. Rice export prices are like stocks, sometimes they go up, sometimes they go down, sometimes they increase, sometimes they decrease. This is completely normal,” said Mr. Hai.

However, because Vietnamese rice has built a brand and has certain customers. On the other hand, in recent times, Vietnamese enterprises have focused on improving rice quality, building a good rice brand and having certain customers, thereby finding new rice export markets. Therefore, the Winter-Spring rice source (many localities have started sowing) will sooner or later have a market.

In the current context, Mr. Tran Thanh Hai said that businesses and people producing rice need support from many sides. For example, banks should support loans to increase rice purchases and storage, taking advantage of low prices to help stabilize the domestic market. Or the financial sector should quickly complete VAT refund procedures so that businesses can rotate capital.

Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan shared at the regular press conference of the Ministry of Industry and Trade held on the afternoon of January 7.

Regarding this, Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan said that at the beginning of 2025, the Government issued Decree 01 amending Decree 107 dated August 15, 2018 on rice export business. In which, the Government proposed many solutions for clearer and more transparent management of rice export to ensure food security and maintain export momentum.

One of the important points of the Decree, which took effect from March 1, is the regulation of the responsibilities of rice export traders. According to Decree 107, rice export traders must periodically report to the Ministry of Industry and Trade on the actual amount of paddy and rice in stock according to each specific type on Thursday. However, in Decree 01, traders are given an extension to report periodically before the 5th of each month.

In addition to the document sent to the Ministry of Industry and Trade for direction and management, enterprises must also send it to the Department of Industry and Trade where the trader has its head office, warehouse, milling, grinding or rice processing facility, and to the Vietnam Food Association.

"In its role as state manager, the Ministry of Industry and Trade is committed to promoting rice export solutions to soon remove bottlenecks for this product," Deputy Minister Nguyen Sinh Nhat Tan shared.

Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan stated:

In early 2025, the Government issued Decree No. 01/2025/ND-CP amending and supplementing a number of articles of Decree No. 107/2018/ND-CP dated August 15, 2018 on rice export business. In particular, it added cases of revocation of Certificate of eligibility for rice export business and added regulations on the responsibilities of export traders.

Proposing clearer and more coherent management solutions for rice exports will contribute to ensuring domestic food security. At the same time, regulating rice prices, ensuring rice quality, especially building rice brands. These are solutions to boost rice exports in the coming time.

Source: https://congthuong.vn/gia-gao-giam-sau-bo-cong-thuong-de-xuat-hang-loat-giai-phap-368473.html