Falling rice prices only short term, expert says
HANOI: The recent falls in rice prices are only short-term; the upward trend will continue in 2024 on limited supply, providing significant opportunities for Vietnam’s rice export, analysts say.

According to data from Vietnam Food Association, export rice prices for Vietnam are moving sideways after sharp drop. The price of 25% broken rice dropped by US$20 per tonne in the past week to US$584 per tonne and 5% broken rice by US$19 to US$609, slightly lower than in Thailand.

Meanwhile, 100% broken rice is at US$508 per tonne, US$25 per tonne higher than Thailand’s.

Rice prices are dropping on the psychology of waiting for clearer market trends from rice-import plans of importing countries.

In addition, the main winter-spring crop, typically with good rice quality and output, is coming in two weeks, which will significantly impact the trend of rice prices, according to agriculture expert Hoang Trong Thuy.

Enterprises are waiting for the coming harvest season to prepare for their signed contracts and set price frames for their export contracts in the second half of the year.

Farmers also tend to wait for better times to sell their rice with expectation of higher prices, while the El Nino weather phenomenon is increasing worries about global rice production.

The US Department of Agriculture has lowered its forecast for global rice supply in 2023-2024 by 4.5 million tonnes from the previous forecast of 518 million tonnes.

Meanwhile, demand is estimated at 522 million, meaning a shortage of around four million tonnes which will keep rice prices at high levels in 2024.

Thuy also said rice importers know that Vietnam is entering the largest rice harvest of the year so they were not in a hurry to buy, but waiting for good prices.

The psychology of waiting would continue for a short time. However, the upward trend of rice prices would continue in 2024 on limited supply from India’s rice-export restrictions and the impacts of El Nino on farming.

“The important thing is how to harmonise benefits among farmers, exporters and the nation,” Thuy said, pointing out that the role of exporters is critical.

In fact, few enterprises are capable in terms of capital to stock rice. It’s necessary to increase lending and create favourable conditions for enterprises to access credit at reasonable rates for rice purchases, which will help them to be more active in ensuring supply sources for exports and in establishing relationships with farmers, according to Thuy.

Farmers should also be provided with support in terms of financial aid for fertilisers and pesticides for production in the face of rising input costs.

A combination of solutions would help the rice industry to develop sustainably, Thuy said. — Viet Nam News/ANN
Commodities,Vietnam,RicePrices,ExportOpportunities,LimitedSupply,ElNinoImpact,GlobalRiceShortage,2024Outlook
The recent falls in rice prices are only short-term; the upward trend will continue in 2024 on limited supply, providing significant opportunities for Vietnam’s rice export, analysts say.