SINGAPORE (Reuters) – Rice importers in the Philippines have delayed purchases of around 350,000 metric tons of Vietnamese rice and are in the process of renegotiating deals, after a steep decline in prices, two trade sources with direct knowledge of the deals said.
“There has been a big drop in Vietnamese rice prices in the last few weeks,” said one Singapore-based senior executive at an international grain trading company. “Now buyers are not willing to take the expensive rice.”
Rice importers had signed deals at around $620 per metric ton, free on board, for Vietnamese fragrant rice late last year but now the price has dropped to around $500 per ton, the two trade sources said.
“This is happening just before the new harvest starts in Vietnam,” said the second trading source at an international rice trading firm in Bangkok. “It is big jolt to Vietnamese exporters as some of these deals could turn into defaults.”
Earlier this week, the Philippines, among the world’s largest rice importers, declared a food security emergency to bring down the cost of rice, which it said has stayed elevated despite lower global prices and a reduction in rice tariffs last year.
Global rice prices have dropped since India eased restrictions on rice exports in September and October. Indian prices this week hit their lowest since June 2023 while Vietnamese prices have slid to the weakest since September 2022. [RIC/AS]
The rice market had rallied in 2023 after India, by far the world’s biggest exporter, curbed overseas sales following poor monsoon rains.
But rice inventories in India surged to a record high at the start of December, reaching more than five times the government’s target and potentially boosting exports.
(Reporting by Naveen Thukral; Editing by Michael Perry)
