Last week, rice prices in Vietnam's Mekong Delta region reached their highest level witnessed in ten years, owing to India's recent ban on the export of non-basmati white rice.
Due to a subpar harvest this season brought on by unpredictable weather during the monsoon season and to protect against market repercussions after Russia withdrew from the UN-backed Black Sea Grain deal, the Indian government placed export restrictions on non-basmati white rice. These restrictions helped to lower domestic prices and ensure availability.
Vietnamese Rice Pricing
On 27th July, the cost of Vietnam's 5 percent broken rice soared to an unwitnessed range of US$550-575 per tonne, reaching its highest level since 2011. The Vietnam News Agency (VNA) reported that the same grade of rice was priced at a more reasonable range of US$515-525 per tonne just one week earlier.
Vietnam's average rice export price for the first half of 2023 was $539 per tonne, according to the General Department of Vietnam Customs, representing a remarkable 10.2 percent increase over the same period in the previous year.
The price of rice has been significantly impacted by India's export ban not only on the global market but also on the Vietnamese domestic market. The Vietnam Food Association reports a significant increase in local rice prices.
The price of 5% broken rice, for instance, rose to VND 12,500 (US$0.53) per kg on the domestic market in Vietnam, resulting in an average price of VND 12,304 per kg—a significant increase of VND 754 per kg.
Following India's decision to limit rice exports, exporters in Vietnam are closely monitoring the situation and expect further price increases for rice.
Thailand’s Rice Pricing
Meanwhile, Thailand's rice market also experienced a parallel price surge. On July 27, Thailand's 5 per cent broken rice prices peaked at US$605-610 per tonne, registering the highest levels in the past 11 years.
India's ban on rice export, issued on July 20, aimed at ensuring adequate domestic availability of rice at reasonable prices. Consequently, India's own rice prices soared to US$445-450 per tonne, setting a record high in the past five and a half years.
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