Setting a floor price to tackle challenges in rice exports: Insiders

Setting a floor price to tackle challenges in rice exports: Insiders

The global rice market has shifted rapidly, particularly after India lifted its export ban in September 2024.

Việt Nam’s rice export sector has encountered significant turbulence in the first two months of 2025.

The global rice market has shifted rapidly, particularly after India lifted its export ban in September 2024.

Source: USDA/International Grain Council (Note on FOB quotes: Thai 100B, US 4 per cent, all others 5 per cent broken white rice).

Source: USDA/International Grain Council (Note on FOB quotes: Thai 100B, US 4 per cent, all others 5 per cent broken white rice).

As of March, Việt Nam’s 5 per cent broken rice price plummeted to US$393 per tonne, marking a staggering 40 per cent drop from the end of 2023. This sharp decline places Việt Nam’s rice price at the lowest among the major exporting nations, only slightly above Pakistan.

Amid these challenges, the Ministry of Agriculture and Environment convened a crucial meeting on Tuesday, bringing together key stakeholders, including local authorities, industry associations and leading rice exporters, to assess the situation and devise immediate and long-term solutions.

According to the US Department of Agriculture (USDA), global rice production is forecast to hit a record 532.7 million tonnes in 2025, contributing to a total supply of 712.15 million tonnes.

However, consumption, though growing to 530.5 million tonnes, is still lagging behind the supply surge. This imbalance has intensified price pressures, exacerbated by India’s return to the market and increased exports from Kazakhstan.

Director of the Department of Quality, Processing and Market Development, Ngô Hồng Phong, said that global rice trade in 2025 is projected to reach 58.5 million tonnes, slightly below 2024 levels.

“Despite strong demand from countries like China and Indonesia, abundant supply is weighing down prices worldwide,” Phong noted.

Production and export pressures

Việt Nam’s Mekong Delta, the nation’s rice bowl, is expected to produce 24.05 million tonnes in 2025, with an estimated over 7.54 million tonnes allocated for export.

Yet, despite this robust output, exporters face immense difficulties securing favourable contracts as importers, especially in Southeast Asia, delay purchases, anticipating further price drops.

An Giang Province, a key rice-producing region, reported that it had exported 29,900 tonnes in the first two months of 2025, generating $15.2 million. While this contributes significantly to the local economy, Vice Chairman of An Giang Provincial People’s Committee Ngô Công Thức stressed the need for stronger government support.

“We must attract large-scale investments and build integrated production-consumption chains to stabilise the market,” he said.

Source: USDA/International Grain Council (Note on FOB quotes: Thai 100B, US 4 per cent, all others 5 per cent broken white rice).

Proposed solutions

To navigate the current turmoil, industry leaders and government officials proposed several strategies.

The Vice Chairman of the Việt Nam Food Association, Đỗ Hà Nam, urged the State Bank of Việt Nam to ease access to credit, increase lending limits and extend repayment periods.

This would enable enterprises to hold inventory, avoid distress sales and wait for more favourable prices. Additionally, creating state-supported rice warehouses would allow businesses to stockpile during periods of oversupply and release inventory strategically to stabilise prices, he added.

Stakeholders also recommended reinstating a minimum export price under Decree 107/2018/NĐ-CP, suggesting a floor price of $500/tonne (FOB) to protect exporters from excessive losses.

The Ministry of Industry and Trade (MoIT) is actively reviewing this measure while exploring ways to activate strategic reserves for market stabilisation. Furthermore, stricter monitoring of intermediary traders who drive speculative price drops was suggested to prevent market manipulation.

Diversifying export markets beyond traditional partners like the Philippines and Indonesia was essential, said the Deputy Minister of Industry and Trade, Nguyễn Sinh Nhật Tân.

Simultaneously, enhancing rice quality and promoting high-value, specialty rice varieties could help Việt Nam differentiate itself in the global market. This should include fostering partnerships with international research institutions to develop resilient, high-yield rice strains and promoting organic and sustainably grown rice, which could command premium prices.

The Government and private sector could collaborate on large-scale infrastructure projects, such as modernising rice milling and packaging facilities to meet international quality standards. Investing in better logistics networks would reduce transportation costs and enhance Việt Nam’s competitiveness in distant markets like Africa and the Middle East.

The Ministry of Agriculture and Environment is compiling all feedback from the recent meeting to draft an emergency directive for the Prime Minister, outlining both immediate relief measures and structural reforms.

“Our priority is to balance export growth with domestic price stability, while accelerating market access efforts globally,” Tân said. 

Bizhub