The Indian Ministry of Commerce and Industry has signed a decision to lift the ban on non-basmati white rice exports, with the condition that the floor price for this item is 490 USD/ton. This move will boost the abundant supply in the world market, forcing rice exporting countries such as Pakistan, Thailand, Vietnam, ... to reduce prices to increase competitiveness in this market.
Ms. Phan Mai Huong, co-founder of SSResource Media Pte.Ltd (Singapore) - specializing in providing information and analyzing the world rice market, commented that currently, the export price of 5% broken rice from Myanmar is from 480 - 500 USD/ton, Pakistan is about 500 - 510 USD/ton. Therefore, India's decision to set a floor price of 490 USD/ton is quite close to the current market, limiting the situation of massive price reduction. Although India has opened the market for popular white rice, it has not opened freely but applied a floor price, so there will be no situation of traders selling massively at cheap prices. Vietnamese businesses need to calmly monitor, especially in the context that Vietnam's supply from now until the end of the year is not much.
According to rice businesses in Vietnam, India is the world's largest rice exporter, accounting for about 40-45% of the world's total output. When India lifts the export ban on white rice, it will affect the world's supply and demand, making the supply more abundant.
Speaking with Lao Dong, Mr. Nguyen Dinh Trong - General Director of King Green Natural Food Joint Stock Company (Vua Gao) - the unit that won the bid for two batches of rice with an output of nearly 60,000 tons in the rice bidding round last September of Perum Bulog (Indonesia's National Logistics Agency), said that the analysis and prediction of the possibility of India reopening its export market has shown that the Vietnamese rice industry will have to face direct competition.
"Although the rice price at that time was quite low, we still decided to sign the contract to ensure the output of Vietnamese rice. Otherwise, this contract could fall into the hands of other countries such as Pakistan and Myanmar, causing difficulties for the output of domestic rice. Therefore, the leadership of Vua Gao has calculated and prepared carefully" - Mr. Trong shared.
Mr. Trong also added that although the recent storms and floods have caused significant impacts, the domestic rice supply remains stable. When India resumes exports, Vietnam's 5% broken white rice exports will be strongly impacted, while fragrant rice will be less affected. From now until the end of the year, the domestic fragrant rice price is forecast to be stable, without major fluctuations. For rice used in production, the price will likely be adjusted down according to market supply and demand.
According to the Vietnam Food Association (VFA), Vietnam's rice export price is still the highest among rice exporting countries. The price of 5% broken rice in Vietnam is currently at 538 USD/ton, while the price of rice in Thailand is 500 USD/ton, Pakistan is 493 USD/ton, and India is 492 USD/ton. However, the price of Vietnamese rice is unlikely to fall below 500 USD/ton thanks to high demand from major markets and high-quality rice varieties.
