Amid ongoing volatility in global agricultural markets, Vietnam’s rice sector has recorded encouraging export growth during the first months of the year. However, the paradox of rising export volumes but declining export value, coupled with mounting pressures from climate change and increasingly stringent quality requirements, is driving the need for a comprehensive restructuring of the rice value chain, with transparency and traceability at its core.

The paradox of “higher volume, lower value”

According to the latest data from the Ministry of Agriculture and Environment, Vietnam exported approximately 4.5 million tonnes of rice worth USD 2.09 billion during the first five months of 2026.

Compared to the same period in 2025, export volume increased by 6.6%, while export value declined by 3.6%. The primary reason was a significant decrease in the average export price, which fell to approximately USD 467.6 per tonne, down 9.6%, reflecting intense competition in international markets.

In terms of export destinations, the Philippines remained Vietnam’s largest rice buyer, accounting for nearly 47% of total exports with approximately 2.1 million tonnes.

Notably, China ranked second with nearly 18% market share but recorded the strongest growth rate, reaching 54%. However, industry experts noted that demand from China is largely driven by short-term inventory replenishment and the opportunity to capitalize on competitive pricing, rather than a stable long-term trend.

Market observations in the Mekong Delta on June 10 revealed mixed developments in the domestic rice market. Prices of rice materials and by-products increased slightly, while export rice prices remained under downward pressure.

Specifically, IR 504 paddy rice increased by VND 50 per kilogram to VND 8,700–8,800 per kilogram, while CL 555 rice rose by VND 100 per kilogram to VND 9,100–9,300 per kilogram.

Among by-products, rice bran prices increased by VND 200 per kilogram, reaching VND 7,900–8,100 per kilogram.

Conversely, fresh paddy prices in provinces such as Bac Lieu and Long An showed signs of weakening, with trading activity slowing as traders suspended purchases or sought lower prices.

In export markets, Vietnamese rice prices displayed varying trends. Fragrant rice with 5% broken grain remained stable at USD 495–497 per tonne, while Jasmine rice declined by USD 6 per tonne to USD 509–513 per tonne. White rice with 5% broken grain fell by USD 1 per tonne to USD 412–416 per tonne.

Compared with competitors, Thai white rice with 5% broken grain currently commands a higher price, ranging from USD 459–463 per tonne.

The narrowing price margins despite rising export volumes indicate that Vietnam’s rice sector is reaching the limits of its traditional growth model. To achieve sustainable development, the industry must shift from managing individual production stages to managing the entire value chain.

Restructuring the value chain and unlocking potential markets

Industry stakeholders increasingly agree that traceability must go beyond product labeling and become the management infrastructure for the entire production process.

Mr. Huynh Van Thon, Chairman of Loc Troi Group, emphasized that traceability systems should encompass seed varieties, agricultural inputs, cultivation activities, processing, and distribution.

Only when data are interconnected and verified within national data systems can regulatory authorities effectively monitor food safety risks and prevent trade fraud.

Organizing a transparent value chain not only protects the reputation of Vietnamese rice in international markets but also delivers direct benefits to domestic consumers.

According to industry estimates, establishing a transparent supply chain would increase costs by only about VND 120,000 per person annually, a reasonable investment in exchange for greater trust and food safety.

Amid pricing challenges, free trade agreements (FTAs) are increasingly viewed as key opportunities to enhance export value.

Vietnam currently participates in approximately 20 FTAs, many of which offer significant tariff advantages for rice exports.

Under the EVFTA, the European Union grants Vietnam a tariff-free quota of 80,000 tonnes of rice annually. The CPTPP allows access to markets such as Canada with zero import tariffs, while the UKVFTA provides a duty-free quota of 13,000 tonnes of rice.

Despite these opportunities, Vietnamese rice exports to such markets remain limited, utilizing less than 5% of available quotas.

Meanwhile, exports continue to rely heavily on traditional markets such as the Philippines and Indonesia, where tariff levels remain higher and profit margins relatively low.

A positive development is Vietnam’s successful export of nearly 400 tonnes of premium fragrant rice to the European Union, demonstrating the ability of domestic enterprises to meet demanding quality and traceability requirements.

However, expanding exports to premium markets will require greater investment in high-quality production systems and systematic brand development.

Mr. Huynh Van Thon stressed that traceability must become the management foundation of the entire production chain, from seed selection and agricultural inputs to final distribution.

Only through integrated and verified data systems can Vietnam protect its rice brand and comply with the stringent requirements of premium markets such as the European Union and Canada.

Another persistent challenge remains access to capital.

Many farmers continue to rely heavily on informal financing, making supply chains vulnerable to disruption when cash flows become constrained.

As a result, preferential credit mechanisms linked directly to transparent production contracts are needed to strengthen value chain stability.

Prospects and challenges ahead

According to Mr. Do Ha Nam, Chairman of the Vietnam Food Association, 2026 will remain a challenging year for the rice industry.

One of the most promising opportunities lies in expanding exports to African markets, where several countries have expressed interest in importing rice directly from Vietnam.

Combined with forecasts that El Niño conditions may persist and contribute to supply shortages across Asia, this development could strengthen the competitive position of Vietnamese rice.

Beyond technical compliance and transparency requirements, access to capital continues to represent a major bottleneck.

Many farmers still depend on informal lending channels, while enterprises must mobilize substantial resources to support contract farming and product procurement.

When cash flow disruptions occur, supply chain linkages can easily break down.

Consequently, both government agencies and financial institutions need to establish preferential financing mechanisms that directly support farmers based on transparent production data and contractual arrangements.

In addition, the role of local authorities at the commune level should be strengthened.

These authorities are best positioned to monitor crop conditions, agricultural input quality, and procurement activities.

Linking supply chain management with local implementation capacity will be critical to maintaining production discipline and ensuring compliance.

The Ministry of Agriculture and Environment has forecast that El Niño may return and persist through 2027, increasing the risk of reduced agricultural output across many Asian countries.

While this could support higher rice prices in the short term due to concerns over supply shortages, the long-term combination of climate risks and increasingly demanding import requirements from key markets such as the Philippines will require Vietnam’s rice industry to undertake genuine structural transformation.

Source: Bao Chinh Phu