Vietnam weighs rice export floor price as domestic and regional markets diverge
The Vietnam Food Association is considering a $500-per-tonne FOB floor for fragrant rice exports and a minimum procurement price of VND7,000 per kilogram for fresh paddy. The proposal follows weaker export earnings and measures by the Philippines that have pressured Vietnamese rice prices.
VFA proposes price floors
The Vietnam Food Association (VFA) is proposing a floor price of $500 per tonne FOB for fragrant rice exports and a minimum domestic procurement price of VND7,000 per kilogram for fresh, unmilled paddy. VFA chairman Đỗ Hà Nam told Reuters that the association was working with member processors and exporters to finalize the plan. If approved, the thresholds would initially remain in force through the end of this year.
The proposal is intended to protect farmers and exporters from buyers pushing prices down. Nam said current market prices were still above the proposed floors, making the measure a safeguard against a deeper decline rather than an immediate increase in transaction prices. Vietnam is the world’s third-largest rice exporter, according to Vietnambiz, but its export market has come under pressure in recent months as the Philippines, its largest destination, introduced measures to limit rice imports.
Export volume rises while revenue falls
Vietnam exported 5.53 million tonnes of rice during the first seven months of the year, up 0.5% from the same period a year earlier, according to data from the country’s Statistics Office cited by Vietnambiz. Export revenue nevertheless declined 7.1% to $2.62 billion. The divergence indicates that lower realized prices outweighed the modest increase in shipment volume.
Vietnamese export quotations also moved unevenly. VFA data showed that 5% broken white rice rose by $3 per tonne from the end of July to $434-$438 per tonne. Jasmine rice fell by $10 per tonne to $541-$545, while 5% broken fragrant rice was unchanged at $500-$510. The proposed $500 floor for fragrant rice therefore sits at the lower end of its current quoted range.
Domestic prices show limited movement
Prices in the Mekong Delta changed only slightly. IR 50404 raw rice gained VND50 per kilogram to VND9,750-VND9,850, while CL 555 raw rice lost VND50 to the same range. Fragrant broken rice increased VND50 to VND8,600-VND8,700, but bran declined VND50 to VND7,700-VND7,800.
Fresh paddy prices reported by An Giang’s Department of Agriculture and Environment remained stable. IR 50404 traded at VND6,100-VND6,200 per kilogram, Đài Thơm 8 at VND6,900-VND7,100 and OM 18 at VND6,900-VND7,000. OM 5451 stood at VND6,500-VND6,600 and OM 34 at VND6,100-VND6,300. A VND7,000 procurement floor would consequently exceed the reported ranges for several varieties, while overlapping with current quotations for Đài Thơm 8 and OM 18.
Philippine demand remains decisive
Competing Asian origins recorded mixed prices. Thailand’s 5% broken white rice fell by $3 per tonne to $450-$454, while Pakistan’s equivalent gained $1 to $399-$403. India’s 5% broken white rice declined by $2 to $361-$365, whereas its 5% broken parboiled rice rose by $3 to $366-$370.
The Philippine Department of Agriculture said it would not impose a temporary import ban as the country prepares for an El Niño expected to strengthen around November and December. Agriculture Secretary Francisco Tiu Laurel Jr. said imports had reached 3.3 million tonnes by August 3. Philippine rice inventories stood at 2.51 million tonnes in July, according to the Philippine Statistics Authority, down 10% from 2.79 million tonnes a year earlier but up 6.8% from 2.35 million tonnes in June. Households held 47.7% of stocks, commercial operators 39% and National Food Authority warehouses 13.3%.
