What decision did the Philippines make that caused Vietnam's rice export price to plummet?

Data from the Vietnam Food Association (VFA) shows that from September 6-7, rice export prices continuously decreased sharply.

Philippines đưa ra quyết định gì khiến giá gạo xuất khẩu của Việt Nam tuột dốc?

Vietnam's rice export prices have dropped sharply. (Source: Industry and Trade Newspaper)

Specifically, Vietnam's 5% broken rice is currently down 15 USD per ton compared to the session on September 5 to 628 USD; 25% broken rice is also down 15 USD to 613 USD per ton. These are the two biggest consecutive declines since India banned rice exports.

In the world market, Thailand's 5% broken rice also decreased by 15 USD to 618 USD per ton, 25% broken rice decreased by 12 USD to 563 USD per ton compared to September 5.

The decline in rice export prices is believed to be affected by the ceiling order of the Philippines - Vietnam's largest rice consumer.

On August 31, Philippine President Ferdinand Marcos Jr. set a rice price ceiling of 41 Pesos ($0.72) per kilogram for regular-milled rice and 45 Pesos ($0.79) per kilogram for well-milled rice, equivalent to 720-800 USD per ton.

The imposition of this order was due to the rapid increase in domestic retail prices in the Philippines and speculation.

In the first 7 months of this year, Vietnam exported nearly 1.94 million tons of rice to the Philippines, accounting for nearly 40% of Vietnam's total rice exports.

In the domestic market, domestic rice prices are much higher than export prices. Data from the VFA shows that domestic rice prices in the last week of August (from August 25 to 31) continued to be adjusted up by 79-254 VND per kilogram, depending on the type.

Specifically, each kilogram of brown rice grade 1 costs 12,646 VND, white rice grade 1 is 14,750 VND, 5% broken rice is 14,564 VND, 15% broken rice is about 14,333 VND and 25% broken rice is 14,033 VND.

In a recent report to the Prime Minister, VFA noted that the rapid increase in rice prices has led to a breakdown in the supply chain from farmers to traders, rice mills and rice exporters. This has made it difficult for exporters to mobilize goods to fulfill signed contracts.

Source