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Rice prices down 12% amid bountiful harvest, plunging global demand

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Paddy prices in the Mekong Delta have fallen to VND7,200-8,000 (US$0.29-0.32) per kilogram.

In the year to date paddy prices have decreased by VND1,000-1,300 per kilogram, according to the Vietnam Food Association.

In An Giang Province, the IR 504 variety is selling for VND7,200-7,350 and Japanese J02 for VND7,800-8,000.

Nguyen Van Thuan, a farmer in Kien Giang Province, is preparing to harvest nearly one hectare of the winter-spring crop.

Last month traders paid deposits to buy his paddy for VND9,000, but have now lowered it to VND8,000.

Nam of Tien Giang Province sold his paddy for VND7,700, down 10% from last month.

Huynh Thi Bich Hien, director of export company Ngoc Quang Phat, which usually procures paddy and rice in the Mekong provinces, said it is buying 1,000-2,000 tons of paddy per day and the highest price it has paid is only VND8,000.

Vietnamese export prices have also fallen as a result, with 5% broken rice currently fetching $594 per ton, down nearly 10% since the beginning of the year.

It is $12 and $15 cheaper than rice from Pakistan and Thailand.

Vietnam’s 25% and 100% broken rice varieties have also seen prices decline similarly to $570 and $498.

The plummeting paddy and export rice prices are due to excess supply and sluggish rice exports, according to Hien.

The winter-spring crop harvest is three times larger than the autumn-winter one, she said.

With nearly 1.5 million hectares planted in the delta alone, 300,000 ha of which have been harvested, the crop would provide ample supply for domestic consumption and exports, according to Nguyen Nhu Cuong, director general of the Department of Crop Production.

Meanwhile, countries that usually import large volumes of rice from Vietnam have not awarded new contracts.

The surge in prices due to soaring global demand in late 2023 caused huge losses for many exporters since they had signed contracts at fixed prices before procuring the grain, Hien said.

This has now forced them to lower their buying prices, she added.

Dinh Ngoc Tam, deputy CEO of agricultural goods exporter Co May, said rice prices and global demand are merely returning to their usual range after shooting up due to a temporary shortage.

Even at current prices, farmers earn profits of VND3,000-4,000 per kilogram, he said.

Vietnam is facing increasing competition in the international market, he said.

Thailand is looking to boost exports to the Philippines, Vietnam’s largest buyer, he said.

But global supply is still fairly limited, and prices are unlikely to fall below $570-600 unless India lifts its rice export ban, he added.

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