According to data released last Friday, Vietnamese five percent broken rice was sold for US$410-420 per tonne, down $20 per tonne from two weeks ago, but higher by $10 per tonne from one month ago.
The price of Thai rice (of the same variety), in comparison, declined $15 per tonne to $380 per tonne from two weeks ago. The price was also lower by $25 per tonne from one month ago.
Compared with the same period last year, the Vietnamese rice price is higher by $5 per tonne, while the price of Thai rice fell $170 per tonne during the same period.
Do Van Hao, an expert at the Institute of Policy and Strategy for Agriculture and Rural Development, told Biz Hub that in recent times, there have been a few instances when the export price of Vietnamese rice surpassed that of Thai rice. He pointed out that it was not the first time that the Vietnamese rice price had climbed higher than the Thai rice price because such a phenomenon had occurred in the past, although for very short durations.
"There are some reasons that have pushed the price of Vietnam's rice higher than the price of Thai rice recently. First, Vietnam won a contract to export 500,000 tonnes of rice to the Philippines on November 25. The lowest price under this contract was $462.25 per tonne, while Thai rice fetched a price of $475 per tonne. That has stimulated demand for Vietnamese rice and raised export prices," he said.
Second, Thailand has permitted its rice granaries to export rice stored from earlier harvests. Currently, its granaries store tens of millions of tonnes of rice and the increasing exports have led to falling prices, he noted.
Third, the exchange rate between the Thai baht and the US dollar has seen an increasing trend, which has lowered the price of rice in the local currency," he added.
Echoing the same sentiment, agricultural expert Vo Tong Xuan noted that while Vietnam is exporting its latest rice harvest, Thailand is selling rice from its granaries, leading to price disparities.
"Enterprises exporting rice to China and Africa have lowered their reserves. Now, in the middle of December, we cannot purchase rice from farmers because the third crop was harvested in November. Lower supply is one of the reasons that have pushed the price higher," he added.
"I think the current price is suitable because Thailand is not lowering the price of its high-quality rice. Right now, Cambodia is harvesting a new crop and a portion of that will be exported to Vietnam," he said.
Hao shrugged off worries about importing rice from overseas while the price is high, noting that price disparities are currently not too wide. He also pointed out that the variety of rice exported is different from that consumed in Vietnam.
Hao added that "Thai rice could, however, be imported for domestic consumption if its price is much lower than that of Vietnamese rice."
"Recently, Vietnam has imported large quantities of rice from Thailand, and if Thai rice is cheap and of good quality, the level of imports could increase," he said.
According to the Vietnam Food Association (VFA), between January 2013 and December 19, the quantity of rice exports reached 6.325 million tonnes, which had a free-on-board (FOB) value of $2.735 billion and a Cost, Insurance and Freight (CIF) value of $2.848 billion.
Between December 1 and December 19, the quantity of rice exported was 183,897 tonnes, which had an FOB value of $86.569 million and a CIF value of $91.969 million.
Speaking to the Vneconomy newspaper, general secretary Huynh Minh Hue said the total quantity of rice exports for 2013 is estimated at around 6.6 million of tonnes, lower than expected. The VFA had set a goal of exporting 7.5 million tonnes of rice at the beginning of 2013.