Farmers harvest rice in southern province of Kien Giang. Photo by VnExpress/An Binh

Surging Vietnam rice prices are worrying exporters who fear their customers may buy cheaper options offered by competitors instead.

Vietnam’s 5% broken rice price has reached $653 per ton, over 16% higher than its two biggest competitors Thailand and Pakistan.

Do Ha Nam, deputy chairman of the Vietnam Food Association, said buyers might look for other suppliers, such as those from Thailand, for a better price.

Vietnamese exporters therefore have been unable to win bids to provide rice to Indonesia due to the high prices as the Southeast Asian maritime neighbor has already begun buying from less expensive suppliers.

Big exporters are now hoarding rice to ensure their supplies, making smaller companies either have to pay farmers more money for rice or cancel orders with foreign buyers, he added. Some exporters have canceled contracts signed earlier due to fear of being unable to fulfill the orders.

Nguyen Viet Anh, CEO of Phuong Dong Foods, said that Vietnam’s unprecedented rice prices are now posing a high risk to companies that do not want to keep large inventories due to fears that India might lift its ban on rice exports, which would send Vietnam prices plunging.

India imposed a ban on certain rice varieties in July and is widely expected to keep the ban in place until early next year.

Vietnam exported 7.1 million tons of rice worth $4 billion in the first 10 months, up 17% in volume and 35% in value.

For the whole year, the country should be able to export up to 8 million tons, said Pham Quang Dieu, an analyst from market research firm AgroMonotor.

Published Date: November 4, 2023