The return of rice from India could force countries like Pakistan, Thailand, and Vietnam to adjust prices to compete.
On September 28, India lifted its ban on non-basmati white rice exports, with a floor price of $490 per ton. Previously, the country had halved its export tax on basmati rice (a fragrant, long-grain rice native to India and many South Asian countries) to 10%. The South Asian country has abundant supplies, with reserves reaching 32.3 million tons, up nearly 39% from the previous year.
The move cooled global rice prices as global supply increased. Last week, Vietnam’s 5% broken rice fell to $560 a ton, down $20 from the previous week. Similarly, Thai rice also dropped to $550 a ton, the lowest level in more than a year.
The leader of a rice exporting enterprise in Dong Thap said that India's return to the market will put downward pressure on prices of 5% and 25% broken rice.
Mr. Dinh Ngoc Tam, Deputy General Director of Co May Company, also commented that rice prices will decrease but will hardly fall below 500 USD per ton, because domestic supply is not abundant.
In Indonesia’s 450,000-ton rice tender, Vietnam won 59,000 tons at $548 per ton, down $32 from last week. Despite the drop in rice prices, demand from major markets such as the Philippines, Indonesia, and Malaysia remains high, maintaining strong demand pressure for Vietnamese rice.
Regarding fragrant rice ST24 and ST25, Mr. Tam predicts that the price of this type will hardly decrease, and may even increase due to the scarcity of supply. This year's autumn-winter crop is affected by climate change, causing productivity to decrease. Mr. Tam said that the production cost of ST25 rice is over 32,000 VND per kg. However, since the beginning of the year, businesses have kept the retail price around 30,000-31,000 VND per kg, causing difficulties for them.
According to the Vietnam Food Association (VFA), rice prices fell last week and may continue to fall. Currently, Vietnamese rice is still higher than Thai and Pakistani rice.
The Ministry of Agriculture and Rural Development said that in the first 8 months of the year, Vietnam exported 6.16 million tons, earning nearly 3.85 billion USD. The average export price of rice reached 625 USD per ton, up nearly 15% over the same period last year. In the first 8 months, Vietnam completed 81% of the plan and is expected to achieve the target of exporting 7.6 million tons of rice this year.
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