According to a Reuters report, rice prices in Vietnam have surged to their highest level in more than two years due to tight supplies and concerns about the impact of the El Nino weather pattern on production
The average price for Vietnam's 5% broken rice reached US$498 per metric ton, surpassing the US$490-US$495 range seen earlier in June and marking a peak since April 2021.
Traders have cited tight supplies and worries about the potential effects of El Nino as factors driving up domestic paddy prices and dampening production prospects. Customs data reveals that Vietnam's rice exports from January to May rose by 30.8% compared to the previous year, reaching 3.62 million metric tons and valued at US$1.9bn.
The onset of El Nino has sparked concerns about hot and dry weather across Asia, with a US forecaster predicting droughts in various regions. Thailand's 5% broken rice prices remained steady at US$490-US$495 per metric ton, not far from the levels exceeding US$500 reached in May.
The absence of new supply entering the market coupled with export demand, along with unpredictable weather causing flooding and droughts, is expected to keep prices strong, as noted by a trader based in Bangkok.
In addition to the tight supply situation, increased government procurement rates have also contributed to the rise in prices for India's 5% broken parboiled rice. The variety hit a more than three-month high of US$390-US$398 per metric ton, compared to US$388-US$395 earlier in June.
