Rice Market Under Pressure: Vietnam Volumes Up, Prices Sliding

Vietnam’s rice market is entering 2026 with a paradox: export volumes are rising, yet overall export earnings are falling as global prices soften. India’s FOB export offers are broadly steady, but face downward pressure from cheaper Vietnamese origins and cautious demand in key importing regions. Futures on CBOT and rice contracts in Europe remain at multi‑year lows, reinforcing a bearish global tone. In the near term, ample supply from Vietnam’s winter–spring harvest and stable to improving weather in key Asian producers suggest continued headwinds for prices, even as freight and insurance costs edge higher due to geopolitical risks. The core of the current market story lies in Vietnam, where January–February 2026 rice exports rose about 5% year‑on‑year to roughly 1.3 million tonnes, but export value fell by more than 11% as average export prices dropped 15.4% to around USD 464/tonne. Vietnam’s 5% broken is trading near USD 365/tonne and has been broadly stable week on week, yet this level marks a substantial decline versus previous years as buyers push back and alternative origins compete more aggressively. Demand remains strongest from the Philippines, China and selected African markets, but orders from Ghana and Côte d’Ivoire have weakened sharply, undercutting Vietnam’s export mix. Against this backdrop, Indian basmati and non‑basmati FOB offers in New Delhi are holding flat, suggesting that Indian exporters are resisting deeper discounts for now. Rising supply during Vietnam’s winter–spring harvest is another key factor weighing on sentiment. Southern Vietnamese ports handled more than 382,000 tonnes of rice in February alone, with a large share bound for the Philippines and Africa. Traders report that, although Middle East tensions have not directly disrupted rice flows, higher freight and insurance premiums are eroding margins and limiting the room for aggressive price cuts. For buyers, this creates a window to secure forward coverage at multi‑year‑low price levels, but also demands careful management of logistics and counterparty risk.

Prices & Market Structure

Spot & Export Price Landscape (all values in EUR)

Based on the Raw Text, Vietnam’s average export price in January–February 2026 was about USD 464/tonne, while 5% broken is currently around USD 365/tonne, stable week on week. Converting at an indicative 1 USD = 0.92 EUR gives approximately 427 EUR/tonne for the average export basket and about 336 EUR/tonne for 5% broken. These levels align with recent reports of Vietnamese offers in the USD 360–365 range FOB.

From the structured price data, Indian FOB offers ex‑New Delhi (all converted 1 USD = 0.92 EUR) are broadly stable between 21 February and 14 March 2026. Premium organic basmati is around 1.8 EUR/kg (≈1,800 EUR/tonne), organic non‑basmati about 1.5 EUR/kg (≈1,500 EUR/tonne), and mainstream steam/sella non‑basmati between 0.47 and 0.97 EUR/kg (≈470–970 EUR/tonne). Vietnamese specialty rice types ex‑Hanoi range from roughly 0.46 to 1.8 EUR/kg (≈460–1,800 EUR/tonne), with modest week‑on‑week declines visible across most categories, consistent with the Raw Text’s description of price pressure.

On the futures side, CBOT rough rice contracts are trading at multi‑year lows, with open interest drifting lower, signalling reduced speculative participation and a generally weak risk appetite for upside price exposure. Euronext rice futures similarly hover near their weakest levels since 2020, underscoring a broad surplus narrative across Asia and parts of the EU.

Supply & Demand Dynamics

Vietnam: High Volumes, Softer Earnings

The Raw Text indicates Vietnam exported around 1.3 million tonnes of rice in January–February 2026, up about 5% year on year. Export earnings reached roughly USD 599.3 million, but this represented an 11.2% decline versus the previous year. The average export price fell to about USD 464/tonne, a 15.4% year‑on‑year drop, clearly illustrating the margin squeeze for Vietnamese exporters.

February alone saw about 640,000 tonnes shipped, worth around USD 289.4 million. Southern ports moved more than 382,000 tonnes in February, highlighting strong logistical throughput despite softer global prices. The Philippines remained Vietnam’s largest buyer, accounting for about 47.6% of exports, followed by China at 18.3% and Ghana at 8.9%.

Exports to the Philippines increased by 17.6%, while shipments to China surged even more sharply, confirming robust demand from ASEAN and East Asia. By contrast, exports to Ghana fell 31%, and shipments to Côte d’Ivoire plunged about 90.9%, reflecting weaker African demand and possibly increased competition from other origins. This changing market mix partly explains the decline in average prices, as Vietnam leans more heavily on price‑sensitive buyers.

India: Large Surplus and Policy Backdrop

India remains the world’s dominant rice exporter, with 2025 exports reported around 21–22 million tonnes after a relaxation of earlier export curbs, split roughly between basmati and non‑basmati shipments. Ample domestic production and comfortable stocks have allowed India to set something of a price floor for global 5% broken rice, even as Vietnam’s export values come under pressure.

Policy remains a key swing factor for Indian non‑basmati flows; however, recent government notices indicate a more permissive stance versus the strict bans and duties imposed in 2022–2023, albeit with continued monitoring and registration requirements. This has supported steady FOB offers in the New Delhi market, as reflected in the flat price series from late February to mid‑March 2026.

Importers: Philippines, China and Africa

The Philippines’ role as Vietnam’s top customer (nearly half of exports) remains central. Recent policy changes, including MFN tariff adjustments and safeguard mechanisms, are aimed at balancing consumer inflation with farmer incomes, but overall import demand for 2026 appears solid, especially after episodes of domestic supply tightness in past years.

China’s share of 18.3% in Vietnam’s exports and its strong growth highlight intensifying competition among exporters to secure Chinese demand, particularly for higher quality and specialty varieties. Meanwhile, the steep cutback in African buying—Ghana’s 31% decline, Côte d’Ivoire’s 90.9% drop—demonstrates that lower‑income markets are extremely price‑sensitive and quick to diversify origins when alternative suppliers offer better terms.

Fundamentals & External Drivers

Production, Stocks and Harvest Progress

In Vietnam, the winter–spring crop is entering peak harvest, lifting near‑term availability. The Raw Text notes that rising supply during this period is encouraging buyers to hold back in anticipation of further price declines, contributing to light trading interest despite already low price levels. This supply overhang is a critical fundamental driver for the current bearish tone.

Regional analysis suggests that major Asian exporters—including India, Vietnam, Thailand and Pakistan—are all entering 2026 with relatively comfortable stocks after generally favourable weather in 2025 and area expansion in some basmati and high‑yield non‑basmati segments. USDA and national agency projections point to modest year‑on‑year increases in global rice production and stable to slightly higher carryover stocks, reinforcing the impression of a well‑supplied world market.

Freight, Insurance & Geopolitical Risks

The Raw Text emphasises that Middle East tensions have not yet directly affected rice shipments but have pushed up freight and insurance costs. This is consistent with broader evidence of elevated war‑risk premiums and rerouting of vessels around high‑risk areas, adding several dollars per tonne to delivered costs for importers in the Middle East, East Africa and parts of Europe.

For Vietnamese exporters, higher logistics costs compress margins when FOB prices are already falling. Indian exporters are facing a similar squeeze, particularly in the basmati segment, where recent disruptions have temporarily frozen some trade routes and depressed export realisations by 5–6%. While these factors do not yet appear sufficient to reverse the overall bearish price trend, they could limit further downside if exporters resist deeper discounts.

Speculative Positioning & Futures Markets

CBOT rough rice open interest has been slipping, according to recent exchange summaries, suggesting that speculative length has been pared back in response to the weak fundamental backdrop. Price action near multi‑year lows on both CBOT and Euronext indicates that managed money is reluctant to build substantial bullish positions until clearer signs emerge of production stress or policy‑driven supply disruptions.

This relatively light speculative participation helps keep volatility in check but also means that any future weather‑ or policy‑driven shock could lead to outsized price moves as fresh length is rebuilt from low base levels.

Weather Outlook for Key Indian Rice Regions

For the next 3–7 days (17–24 March 2026), major Indian rice‑growing regions—including Punjab, Haryana, Uttar Pradesh, West Bengal, Bihar, Odisha, Andhra Pradesh, Telangana and Tamil Nadu—are forecast to see seasonally typical late‑winter to early‑summer conditions. Central and northwestern plains (Punjab, Haryana, western UP) are expected to remain mostly dry with moderate temperatures, supporting field preparation and off‑season irrigation works.

Eastern states such as West Bengal, Odisha and Bihar may receive light, scattered pre‑monsoon showers but no significant flooding or heat extremes are currently indicated. Southern states (Andhra Pradesh, Telangana, Tamil Nadu) are likely to experience warm, predominantly dry weather with isolated thunderstorms along the coast. Overall, the short‑term outlook is neutral to slightly positive for rice, with no acute stress on standing crops or seedbed preparation reported.

For Vietnam, conditions in the Mekong Delta during the winter–spring harvest window remain largely favourable, with only localised concerns around salinity intrusion and water management, as highlighted in prior seasonal analyses. Weather is thus more a facilitator of high output than a constraint, reinforcing the market’s current surplus narrative.

Market Outlook & Price Forecast

Short‑Term Outlook (Next 1–3 Months)

• Vietnam: With export volumes rising and winter–spring harvest pressure peaking, Vietnam’s FOB prices—especially for 5% broken—are likely to remain under pressure, trading near current levels around 336 EUR/tonne with downside risk if demand softens further.
• India: Indian FOB offers for non‑basmati steam and sella are broadly stable, but could face incremental discounting if Vietnamese and Thai prices continue to drift lower. Basmati prices may remain volatile given geopolitical and freight uncertainties.
• Importers: The Philippines and China appear well‑covered in the near term, but may opportunistically extend coverage if prices weaken further. African demand could pick up later in the year if local stocks tighten, but current evidence points to cautious spot buying.

Medium‑Term Considerations (Mid‑2026)

• Global rice balances are comfortable, and any sustained bullish reversal is likely to require either significant weather disruption in one of the major producers or renewed policy tightening in India.
• Ongoing freight and insurance cost inflation may gradually re‑price CIF values upwards even if FOB benchmarks remain soft, particularly into conflict‑adjacent regions.
• Currency movements—especially the Indian rupee and Vietnamese dong against the euro and dollar—will influence export competitiveness and could shift trade flows between origins.

Trading Recommendations

• Importers (Philippines, China, Africa): Consider layering in additional coverage for Q2–Q3 2026 while Vietnamese FOB prices and global futures remain near multi‑year lows. Prioritise Vietnam for price competitiveness, but monitor Indian offers for premium and specialty segments.
• Indian Exporters: Maintain disciplined offer levels rather than matching the deepest Vietnamese discounts, especially in higher‑quality basmati and parboiled categories. Use hedging on CBOT where feasible to protect against sudden downside while preserving upside participation.
• Vietnamese Exporters: Focus on volume commitments with core buyers such as the Philippines and China, even at lower margins, to maintain plant utilisation and logistics efficiency. Explore diversification into value‑added and specialty segments to reduce dependence on highly price‑sensitive African markets.
• Speculators & Funds: Given depressed futures prices and light speculative length, consider cautiously accumulating long exposure with defined risk parameters, recognising that weather or policy shocks could trigger sharp short‑covering rallies from current base levels.
• Industrial Users & Millers in India: Use the current stability in domestic and export‑parity prices to lock in input costs for the next 2–3 months, while retaining some flexibility to benefit from any further softening driven by Vietnam’s supply surge.

3‑Day Regional Price Forecast (All in EUR)

The following indicative forecast spans 18–20 March 2026, assuming stable FX (1 USD ≈ 0.92 EUR) and no major policy changes. Forecasts are qualitative and anchored in the Raw Text’s bearish tone, supplemented by current market observations.

Overall, the rice market is set to remain buyer‑friendly over the coming days and weeks. Vietnam’s strong export volumes and weak prices, coupled with steady Indian availability and benign weather in key growing regions, support a continuation of the current soft price environment, albeit with pockets of logistical and geopolitical risk that warrant close monitoring.