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Wednesday, June 26, 2024

Domestic rice prices decline

By Trung Chanh

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CAN THO – Rice prices in the Mekong Delta, Vietnam’s key rice growing region, have inched down over the past week following the strong rally since the middle of last year.

The staple food has dropped by VND1,200-1,400 per kilogram in just over a week, the most significant price fall since India suspended rice exports in July 2023.

The Indian rice export ban last year led to the global undersupply, which sent Vietnamese rice for export soaring to an all-time high in early December 2023.

At the close of the rice trading session on December 4 last year, 5% broken rice shot up from US$650 to US$663 per ton, the world’s highest so far, except 2008 when rice leapt to US$1,000 per ton but then Vietnam imposed a rice export ban.

However, since the beginning of this year, Vietnam rice prices have edged down. On January 22, 2024, paddy (unhusked rice) varieties like IR 50404 in the Mekong Delta slipped by VND500-700 compared to just a week earlier to VND8,600-8,700 per kilogram, and OM 5451 and Dai Thom 8/OM 18 to VND9,200-9,400 per kilogram.

Speaking to The Saigon Times, rice traders just confirmed another drop of VND600-700 per kilogram at VND8,800 for Dai Thom 8 and OM 18, and VND8,200-8,300 for IR 50404.

A rice exporter in the Mekong Delta province of Dong Thap said the facilities that handle rice exports in the Mekong Delta are purchasing less, with some even pausing purchasing.

Meanwhile, major rice importing countries like the Philippines, Vietnam’s top rice market, are pushing for lower prices. They have proposed US$690 per ton for fragrant rice, and US$670 and US$630 per ton for soft rice varieties like OM 5451 and IR 50404.

These levels are below the ask prices of Vietnamese rice exporters.

In the first half of January 2024, Vietnam exported over 194,000 tons of rice valued at over US$134.5 million despite a volume fall of 32,000 tons. Rice export revenue increased by US$20 million compared to the same period last year. The average rice export price in the first half of January reached around US$693 per ton, a substantial increase from the 2023 average of US$578 per ton.

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