Domestic rice prices continued to rise last week, and exports became active again amidst increased stockpiling by customers, who are concerned about escalating transportation and supply costs.

Domestic rice prices increased quite well last week. According to the Vietnam Food Association, in the Mekong Delta, the highest price for fresh fragrant rice at the field was 5,950 VND/kg, with an average of 5,686 VND/kg, an increase of 96 VND/kg; ordinary rice also increased by an average of 82 VND/kg, with the highest price at 5,550 VND/kg and the average at 5,461 VND/kg.

On the export market, Vietnamese rice export prices are currently fluctuating. According to the Vietnam Food Association (VFA), fragrant rice with 5% broken grains is being offered at around 440-445 USD/ton; 100% broken grains range from 333-337 USD/ton; and Jasmine rice ranges from 452-456 USD/ton. The export price of 5% broken grains fluctuated between 375-380 USD/ton on April 9th, a slight increase from 375 USD/ton the previous week. A trader in Ho Chi Minh City stated that export activity has been more active in recent weeks.

Customers are increasing their stockpiles due to concerns that escalating conflict in the Middle East will drive up shipping costs and fertilizer prices.

The Ministry of Agriculture and Environment predicts that rice prices in the Mekong Delta region will slightly decrease in the early part of the second quarter due to the peak harvest season of the Winter-Spring crop, resulting in abundant supply. However, the market still has some support as import demand from key markets increases to stockpile food amid conflicts in the Middle East.

While the Middle East conflict has not yet directly impacted global rice supply and demand, it has increased transportation, fuel, and maritime insurance costs, thereby driving up export costs and slowing down transactions. Given abundant domestic supply and a lack of significant demand recovery, Vietnamese rice export prices are projected to remain within a narrow range in the short term. However, prices could face upward pressure if logistics costs continue to escalate.

Not only in Vietnam, but export rice prices in other leading Asian rice-producing and exporting countries also increased across the board last week. This upward trend stems from improved market demand, the appreciation of domestic currencies in some countries, and escalating transportation and material costs due to the impact of the conflict in the Middle East.

In India, traders offered parboiled rice with 5% broken grains at $344-$350 per ton this week, a slight increase from last week's $341-$348 per ton. Meanwhile, white rice with 5% broken grains traded at $338-$344 per ton.

An export business in Kolkata said that the sharp appreciation of the rupee has forced them to adjust their selling prices amid gradually recovering demand.

In Thailand, the price of 5% broken rice has surged to between $410 and $440 per ton, compared to the previous range of $370-$375 per ton. Traders in Bangkok explain that the conflict in the Middle East has driven up input costs such as shipping fees, fuel prices, and domestic rice prices. The strengthening baht has also contributed to the increase in export prices. However, overall purchasing power remains weak, and shipments are mainly destined for regular customers.

Regarding supply, rice production in Thailand is declining due to the dry season. Low profits have also led some farmers to temporarily suspend cultivation. Exporters are under significant pressure as mills are hoarding their stock, waiting for higher prices before selling.

In Bangladesh, domestic rice prices remain high. Fuel shortages are disrupting life in rural areas, leaving tens of thousands of farmers struggling to find diesel fuel to pump water for irrigation during the crucial growth stage of their rice crops.

Source: Vietnam.vn