Platts Vietnamese 5% broken white rice prices fall to 29-month low

Vietnamese 5% broken white rice was assessed at $384/mt FOB Feb. 19, down $225/mt year over year. This is the lowest price since Sept. 8, 2022, reflecting a 29-month low, according to data from Platts, part of S&P Global Commodity Insights.

As rice prices face downward pressure, heightened competition from other countries, particularly India and Pakistan, might further impact the pricing of Vietnamese rice, sources told Platts.

Vietnamese rice prices are likely to fall further amid the ongoing winter/spring harvest, the biggest of its three crops a year, which will peak in March, sources said.

Higher production for key varieties such as 5% broken white rice and Fragrant 5% rice is expected, and weak demand from major buyers such as the Philippines and Indonesia, alongside increased rice availability from other origins, is expected to weigh on prices, according to sources.

Currently, Vietnamese rice prices are more competitive than those from other regions, which is likely to attract buyers' attention.

Platts assessed Indian-origin 5% broken rice at $396/mt FOB Feb. 19, and Pakistani-origin 5% broken rice at $384/mt FOB the same day. The weekly Platts-assessed Myanmar 5% broken rice was at $385/mt FOB FCL Feb. 14, while Thai 5% WR was at $409/mt FOB Feb. 19.

Vietnamese rice production is higher compared with last year, however, Indonesia which was a major buyer last year is absent from the market.

"The harvest is ongoing and will likely peak in early March. On the supply side, all looks good, with higher production of 5% WR and fragrant rice as compared to last year's winter/spring crop. However, Japonica and Glutinous rice production is lower," a Vietnam-based trader said.

"Indonesia, which was a big buyer last year, is absent, and the Philippines is buying reduced quantities," the trader added. "Without fresh demand, there will be pressure on prices as the harvest peaks. There is more downside, and any upside will be limited by competing origins."

The Philippines, being the largest buyer of Vietnamese rice, plays a significant role in driving demand for Vietnamese rice. A Vietnamese exporter also emphasized the same.

"Vietnam mainly exports to three countries: the Philippines, Africa, and China. The Philippines is the major buyer, so everything depends on them. For Fragrant 5% rice, we are hearing low demand from the Philippines. When supply increases, prices may drop further," the exporter said.

Market participants anticipate further downward pressure on prices unless demand picks up.

"Everything depends on demand, which seems a bit slow now," another Vietnam-based trader said.

14%-15% of the winter/spring crop has been harvested as of now, according to sources.

Vietnam's milled rice output for the marketing year 2024-25 (January-December) is expected to increase slightly by 200,000 mt year over year to 26.5 million mt, according to the US Department of Agriculture. The area sown is expected to increase while the average field yield remains constant, the data showed.