Addressing bottlenecks in Vietnam’s rice industry

Challenges facing the rice industry

Over the past decade, Vietnam’s rice industry has solidified its position as a global leader, marking a remarkable transformation.

Each year, the country exports approximately 7.5 to 8 million tons of rice, with a record-breaking 9 million tons exported in 2024. The Mekong Delta alone accounts for 90% of Vietnam’s total rice exports. In the recent winter-spring crop, the region’s total harvested rice output was estimated at 10.7 million tons.

According to the Ministry of Agriculture and Environment, Vietnam exported over 1.1 million tons of rice in the first two months of 2025. While this figure represents an increase in volume, export value dropped by 13.6%, reaching only $613 million due to an 18% decline in rice export prices.

The average export price was estimated at $553 per ton. In early March, rice export prices continued to decline sharply in key markets such as the Philippines, Côte d'Ivoire, and Ghana, three of Vietnam’s largest rice importers.

Tran Tan Duc, General Director of Southern Food Corporation (Vinafood 2), noted that in previous years, rice exporters had rollover contracts in place at this time of year. However, in 2025, no such contracts exist.

Since the beginning of the year, Vinafood 2 has purchased over 300,000 tons of rice and continues to acquire more to stabilize the market. Moving forward, rice exporters require financial support to build stockpiles, including 12-month loan cycles with interest rates reduced by 50% in March and April to facilitate export contract disbursements.

Deputy Minister of Agriculture and Environment Tran Thanh Nam attributed the continuous decline in rice exports to complex fluctuations in global rice trade, an oversupply in international markets, and cautious stockpiling by major importers.

Additionally, Vietnam’s rice industry faces three fundamental challenges: lack of linkages, lack of resources, and lack of market orientation. These shortcomings have left the sector vulnerable and reactive, exposing it to significant risks.

Currently, out of 170 rice-exporting enterprises in the Mekong Delta, fewer than 50 are involved in cooperative production models. Establishing stronger linkages between businesses, cooperatives, and farmers is crucial for sustainable development, aligning with the government's initiative to develop one million hectares of high-quality, low-emission rice linked to green growth.

Strengthening linkages to build a strong rice brand

To enhance Vietnam’s rice export competitiveness, experts believe a multi-faceted approach is needed, prioritizing improved quality, branding, and international market positioning.

According to experts, the immediate focus should be on fostering stronger connections between farmers, cooperatives, and enterprises. Infrastructure investments in irrigation and rural transportation will also be essential to support production, expand export markets, and boost trade promotion efforts.

Nguyen Ngoc He, Vice Chairman of the People's Committee of Can Tho City, recently emphasized the urgency of accelerating the one-million-hectare high-quality, low-emission rice initiative in the Mekong Delta.

According to He, this initiative is key to ensuring a stable supply of high-quality rice, giving cooperatives and businesses a secure production base while providing farmers with greater confidence in their operations. At the same time, He encouraged local businesses to identify and penetrate emerging markets with high demand potential, such as the U.S., EU, Japan, and Africa, adjusting production and export plans accordingly.

According to Truong Manh Linh, Executive Director of the Rice Division at Tan Long Group, the company is actively forming partnerships with cooperatives and farmers to secure export-quality rice from a 100,000-hectare production area, with a target of 300,000 hectares by 2030.

Tan Long prioritizes reducing post-harvest losses through advanced drying and storage systems, ensuring both higher efficiency and consistent rice quality. Simultaneously, the company is expanding into high-standard markets such as Japan, Europe, Australia, and the Middle East, which maintain stringent requirements but remain less susceptible to price fluctuations.

Now more than ever, the swift implementation of the one-million-hectare high-quality, low-emission rice initiative is critical. By strengthening production linkages, monitoring residue levels, and reducing emissions, Vietnam can lower production costs, mitigate market volatility, and achieve sustainable long-term economic benefits for its farmers.

Minister of Agriculture and Environment Do Duc Duy forecasted that the rice market would stabilize within two to three months. Until then, maintaining steady purchasing activities and ensuring adequate stockpiling will be crucial. To sustain market stability, export enterprises must establish integrated supply chains with farmers, from production to consumption, forming a long-term strategy for sustainable development.

At a recent meeting with Mekong Delta officials and rice industry stakeholders, Deputy Prime Minister Tran Hong Ha emphasized the need for an accurate assessment of domestic rice market conditions.

The Deputy Prime Minister called for urgent revisions to Decree 107 on rice trading and export policies to remove barriers for businesses. Additionally, he urged the development of a national rice branding strategy, including trademark registration and geographical indications, to facilitate trade promotion and unlock new markets.