Retail rice prices remain high despite sharp decline in export prices

Export prices of rice and paddy have plummeted since the beginning of 2025, reaching their lowest levels in years. Vietnamese 5% broken rice is now priced lower than competitors like India, Thailand, and Pakistan. This follows a period of high prices in 2024 due to India's export restrictions. However, with the ban lifted and increased global supply, prices have dropped. Indonesia and the Philippines, major importers of Vietnamese rice, have also reduced purchases. This decrease in global demand has significantly impacted Vietnam's rice exports. Despite the falling export prices, domestic retail prices remain high. Retailers in major cities like Ho Chi Minh City and Hanoi explain that current stock was purchased at higher prices, preventing immediate adjustments. Increased transportation, warehousing, and labor costs also contribute to sustained high prices. Supermarkets, focused on less volatile mid-range and high-end segments, haven't adjusted prices due to long-term supply contracts. The Ministry of Agriculture and Rural Development plans to reduce rice cultivation areas to address the oversupply. Global rice production is projected to increase, leading to a surplus and potentially further price declines in the coming months.