Due to subdued demand of rice Vietnam is abundant with over one million tonnes of rice left over. Current amount of rice leftover from domestic businesses is now about 1.2 million tonnes, according to the Vietnam Food Association (VFA) and the Ministry of Industry and Trade’s statistics (MoIT) at the end of October, 2016, due to excess supply over demand. Of the 1.2 million tonnes left over, about 443,000 tonnes belong to the Vietnam Southern Food Corporation (VINAFOOD II) and more than 600,000 tonnes belong to other businesses. With regard to the current market demand, many businesses are failing to achieve their planned goal since demand has been largely below supply. China has been Vietnam’s chief rice export market with the most potential, but it has already run out of its import quota on Vietnamese rice. In addition to dwindling domestic demand, the drop in rice price is due to the already low prices from other exporting countries, such as Thailand, Pakistan and India, as they enter their main harvest with the expectation of further price decrease.
In the first 10 months of 2016, Vietnam’s rice export turnover reached over four million tonnes at US$1.9 billion, down around 18 percent in quantity and 14.25 per cent in value compared to the same period in 2015. Since the end of the second quarter in 2016, VFA has decreased estimated export turnover for rice from 6.5 million tonnes to 5.65 million tonnes, the most significant drop in VFA’s history. At present, even this number has proven to be difficult to achieve as Vietnam’s rice market is struggling to bounce back. Meanwhile, Vietnamese farmers continue to harvest three crops per year at insignificant quantity. The Mekong River Delta has also been experiencing heavy rainfall, making the quantity and quality unreliable. VFA asserted that in terms of price and product quality, Vietnamese rice export would have a hard time holding its ground against other supplies.