Global supply tightens, market diversification
Data from Vietnam Food Association and US Department of Agriculture (USDA) shows that in the 2026/2027 crop year, global rice market is trending towards a clear tightening. Global production is forecast to decrease by about 5 million tonnes, while consumer demand increases by 3.8 million tonnes. This disparity will bring global inventories down to about 192.7 million tonnes, significantly lower than in previous cycles.
Notably, structure of reserves among countries is becoming increasingly diversified. Several major exporting countries such as India, Cambodia, Indonesia and the US are projected to reduce their reserves, while China maintains an inventory of approximately 108 million tonnes, acting as a "buffer" for the market.
However, this level of reserves is insufficient to offset overall pressure as climate, trade and geopolitical factors simultaneously increase their impact. Recent global rice price movements clearly reflect this fragmentation. In India, prices remain relatively stable thanks to large reserves. Meanwhile, Thailand and Vietnam have seen an upward trend due to tightening supply in the Asian region.
Not only affected by supply and demand, global food logistics chain is also becoming more vulnerable to geopolitical fluctuations. For example, disruptions in the Strait of Hormuz have halted Iraq's imports of Thai rice. Conversely, the US continues to maintain high prices of around $542/tonne for 4% broken rice due to high production and logistics costs.
Besides market factors, climate risk is emerging as the most important variable for rice industry. International meteorologists are warning of possibility of a "super El Niño" occurring in late 2026, a phenomenon that caused major shocks in 1997–1998 and 2015–2016.
According to scientists, a Kelvin wave under the Pacific Ocean with temperatures approximately 7.5°C higher than average is moving towards South America, considered a signal that could trigger a strong El Niño. If it occurs, this phenomenon could cause a chain reaction of global impacts such as droughts, floods, extreme heat and wildfires, while pushing average world temperatures to record levels in 2026–2027. For the rice industry, which is directly dependent on water and weather, this is a systemic risk that could disrupt the supply-demand balance in the short term.
Alongside supply and demand fluctuations, quality standards are becoming a "soft barrier" in global rice trade. Taiwan Food and Drug Administration (TFDA) recently rejected a 75,000 kg shipment of black rice imported from Vietnam after detecting pesticide residues exceeding permissible levels, according to Taipei Times. Specifically, during inspection, authorities found 0.04 ppm of oxolinic acid in the shipment, while Taiwanese regulations require this substance in rice to be at an "undetectable" level. Currently, Taiwan (China) applies a 100% inspection regime to imported rice as it is a staple food item, aiming to ensure food safety and consumer health.
In Europe, Foodwatch organization also warned that many imported rice, tea and spice products contain pesticide residues that are banned or not approved by European Union. Trend of tightening quality standards is predicted to continue putting significant pressure on rice exporting countries, including Vietnam.
New direction: increasing value instead of increasing production
Vietnam is currently among the top three rice exporting countries in the world but is facing a paradox: production is stable but value tends to decrease. According to Customs Department, as of May 15, 2026, rice exports reached US$1.8 billion. In the first four months of the year, Vietnam exported 3.37 million tonnes, reaching US$1.58 billion. Although production only decreased slightly by 1.4%, value decreased by as much as 10.3% due to a nearly 10% decrease in average export price.
Price of Vietnamese rice in April 2026 was only about US$464/tonne, the lowest level in 5 years. Reason stems from two main factors: India's return to the market after lifting the export ban, increasing supply; Simultaneously, major markets like the Philippines and Indonesia tightened imports in the previous period, leading to a decline in demand.
The Philippines continues to be Vietnam's largest market, accounting for over 50% of total exports. In the first four months of the year, Vietnam exported 1.69 million tonnes to this market, worth over $740 million. Notably, approximately 86% of the Philippines' imports come from Vietnam. This dependence helps maintain stable output, but also creates significant risks. Any changes in policy or consumer demand in this market could directly impact the price and volume of Vietnam's export.
Faced with falling prices and rising standards, Vietnam's rice industry is entering a restructuring phase focused on increasing added value. After one year of participating in the rice industry, Thanh Thanh Cong - Bien Hoa Joint Stock Company (AgriS) has exported approximately 180,000 tonnes of reduced-emission rice, aiming for 280,000 tonnes by 2026 and 580,000 tonnes by 2030. This company pursues a strategy of "going from the market back to the growing region", meaning building export markets first, then developing raw material areas to meet traceability requirements and low-emission standards.
According to Mr. Le Thanh Tung, Standing Vice President and General Secretary of Vietnam Rice Industry Association (VIETRISA), Vietnamese rice industry can only achieve sustainable development when a closely integrated ecosystem is formed. The "four-party" model needs to be upgraded to an integrated value chain, where the State creates policies and infrastructure, scientists provide technology, businesses lead the market and farmers are center of raw material region. This approach helps reduce production costs and paves the way for development of green rice and low-emission rice varieties that suit consumer trends in Japan, the EU and South Korea.
Risk of a "super El Niño" could cause short-term fluctuations in rice demand and prices. However, a more important opportunity for Vietnam lies in changing its export model. From a country that exports large quantities of rice, Vietnam is now facing the requirement to shift towards high-quality, branded rice that meets green standards. This is a condition for maintaining position of Vietnamese rice in the rapidly changing global supply chain. If the transformation is slow, advantage in production volume will hardly compensate for increasing pressure from prices and standards in the long term.

Source: Vitic/ congthuong.vn