Rice prices are high
According to data from the Vietnam Food Association, in the trading session on August 19, Vietnam's rice export price increased beyond that of Thailand and became the most expensive in the world.
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| Vietnam's rice export price is the most expensive in the world, happy or worried? (Photo: Nguyen Hanh) |
Specifically, the export price of 5% broken rice from Vietnam is at 628 USD/ton, while that of Thai rice is at 618 USD/ton. The price of 25% broken rice from Vietnam is 618 USD/ton while that of Thai rice is 561 USD/ton.
Thus, the price of 5% broken rice from Vietnam today is 10 USD/ton higher than that of Thailand, while 25% broken rice from Vietnam is 57 USD/ton higher. Accordingly, the export price of Vietnamese rice is at the highest level in the world.
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| Vietnam rice price on August 18 trading session (Source: Vietnam Food Association) |
Previously, on August 16, the selling price of rice offered by Vietnamese enterprises recorded a decrease of 15 USD/ton compared to August 10, standing at 623 - 627 USD/ton for 5% broken rice and 603 - 607 USD/ton for 25% broken rice.
Meanwhile, for Thailand, after decreasing by 28 USD/ton on August 16 compared to August 10 for both 5% and 25% broken rice, the price on August 17 compared to the previous day continued to decrease by 10 USD/ton for 5% broken rice and 7 USD/ton for 25% broken rice.
Thus, the price of 5% broken rice in Thailand on August 17 was only 613 - 617 USD/ton, while the price of 25% broken rice was 561 - 565 USD/ton. With the new price level established on August 17, Vietnam's 5% broken rice was 15 USD/ton higher than Thailand's and 25% broken rice was 47 USD/ton higher.
Vietnam’s move to reduce its rice export price on August 16 compared to August 10 is explained by the “psychology” of the news that India may soon reopen its rice market. However, businesses do not dare to sign the sale price because it is not effective compared to the current domestic purchase price. Some businesses said that the current domestic rice price is equivalent to the export price.
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| The rice market has been constantly fluctuating over the past month (Photo: Nguyen Hanh) |
News of devastating floods in China’s rice crop has added fuel to the global rice market after several markets banned rice exports. Days of heavy rain have caused severe flooding in China’s top grain-producing region in the northeast, killing 14 people and raising concerns about food security as floodwaters inundated farmland, CNN reported.
Happy or worried?
Vietnam's rice export price is the most expensive in the world, should we be happy or worried? According to rice exporting enterprises, Vietnam's high rice price compared to the world's average is not entirely an advantage, let alone a disadvantage.
Because if the business sells at too high a price, customers can look for new sources of supply at more reasonable prices, then they may lose the market or spend a lot of time and effort to negotiate to buy again. On the other hand, high export rice prices also push up domestic raw material prices, businesses do not dare to buy because of large capital and high risks.
"With other agricultural products, businesses usually sell to customers who pay high prices. However, with rice, it is a bit different," said Mr. Phan Van Co - Marketing Director of Vrice Company Limited - and said that in Vietnam, there are only about 3.5 months per rice crop, which means that the supply is constantly filled. Therefore, rice exporting businesses often think long-term.
Accordingly, exporting enterprises often prioritize selling to traditional markets with stability, quick payment and prices similar to other suppliers. After providing enough for long-term partners, rice enterprises consider new markets with high prices.
“Customers who pay high prices can also be one-time buyers, and the new market will come with risks of payment and commercial fraud ,” Mr. Pham Van Co shared.
According to the General Department of Customs, in the first 7 months of the year, Vietnam's rice exports to China reached nearly 719,000 tons, equivalent to 413 million USD, up 54% in volume and 70% in value over the same period in 2022. Currently, China is Vietnam's second largest rice consuming market, accounting for 15% of total volume and 16% of total rice export turnover.
Experts recommend that as Vietnamese rice faces more opportunities, Vietnamese businesses need to stay calm. Because any problem can arise if we do not manage it well and only look at one side or one aspect.
In the industry structure, prices are determined by supply and demand factors. When demand increases and supply remains unchanged, prices will increase, which we cannot intervene in. However, the rice industry is still affected by external factors. Therefore, farmers and businesses must respect and share opportunities so that next season everyone can cooperate with each other. Businesses and traders also need to be alert in buying and selling at present. Keeping the word "trust" is also a top priority at this time.
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