Vietnam's rice industry needs to enhance quality, expand export markets, and leverage free trade deals

Export prices drop by over 30%

Vietnamese rice exports set a record in 2024 but are facing significant challenges in 2025. In 2024, Vietnam exported 9 million tons of rice, earning US$5.67 billion, up 11.1% in volume and 21.2% in value against 2023.The average export price reached US$627/ton, up 9.1% from the previous year.

However, early signs of decline have appeared in 2025. According to the Ministry of Agriculture and Rural Development, in January 2025, Vietnam's rice export volume reached 500,000 tons, up only 1% from the same period in 2024. Despite this, export value fell sharply by 10.4% to US$308 million, signaling a significant drop in rice prices.

After leading global rice exports for an extended period, Vietnamese rice prices have entered a downward phase with the average export price dropping from US$623/ton in 2024 to US$441/ton.

As of February 7, Vietnam Food Association (VFA) data showed that the price of 5% broken rice fell to US$399/ton, lower than the same-grade rice from Thailand by US$32/ton, India by US$14/ton, and Pakistan by US$5/ton. This is a notable development, as Vietnamese rice is generally regarded as being on par with Thai rice in terms of quality and has traditionally been priced higher than Indian and Pakistani rice.

From its peak of US$700/ton in mid-August 2023, the highest level since 2008, Vietnamese rice prices have dropped consistently, reaching their lowest point in the past three years. As of February 6, 2025, the price had plummeted to US$399/ton, a reduction of US$301/ton or 43%.

Many challenges

VFA forecast that rice exports in 2025 may drop to 7.5 million tons, significantly lower than the record 9 million tons in 2024. This decline is driven not only by increasing competitive pressure but also by the cautious sentiment of traders, who are reluctant to sign contracts with farmers as paddy prices continue to fall.

Businesses forecast continued price drops for 5% and 25% broken rice, which could also lower prices for fragrant and high-quality rice amid rising global competition.

Adding pressure on Vietnam and other major rice-exporting nations, Egypt, Guyana, Japan and Venezuela have also boosted their rice production, while the Philippines stands as an exception with a projected decline in domestic output. According to the U.S. Department of Agriculture (USDA), global rice production in 2025 is expected to hit a record 530 million tons, up 3.1 million tons from previous estimates.

In addition to growing supply pressure, demand from key markets has dropped sharply. China’s imports have fallen 68.4% since last year. In 2025, traditional buyers such as the Philippines and Indonesia plan to reduce imports after stockpiling sufficient reserves in 2024, waiting for prices to fall further before resuming purchases.

Domestic supply abundance has also pushed prices lower. Many exporters still hold stocks from the previous year, while the 2025 Winter-Spring crop, the largest of the year, is entering its peak harvest. Favorable weather conditions have led to higher yields, further boosting supply.

Despite these challenges, some experts believe that the current difficulties are only temporary. With rice prices at a low point, importers are expected to return to the market in the second half of 2025, driving prices upward. Additionally, amid global uncertainties and concerns over food security, many countries are likely to increase rice reserves, providing a boost to market recovery.

Solutions for businesses

To maintain and expand market share, rice exporters must adopt flexible market access strategies, improve product quality and explore new markets. According to the Ministry of Agriculture and Rural Development, it is essential to promote trade, diversify markets and effectively tap into key markets such as the U.S., China, the EU, Japan, South Korea and the Philippines. For Indonesia, it is crucial to maintain a stable export volume and adjust pricing based on market conditions.

Businesses should also strengthen their presence in Halal markets by improving product quality and meeting international standards such as Global GAP and Halal certification. Developing the Vietnamese rice brand and investing in logistics to optimize transportation costs will enhance competitiveness and expand export scale. Companies must transition to sustainable production models, adopt advanced technologies in cultivation and processing, ensure traceable origins and upgrade quality control systems to build trust with international partners.

Furthermore, businesses need to proactively forecast market trends and establish an early warning system to respond to price fluctuations and changing global demand. Understanding consumer trends, optimizing products for different market segments, and building strong partnerships with farmers to stabilize supply will be key to securing and strengthening the position of Vietnamese rice on the global market.