VFA Chairman: Rice reserves to stabilize supply, farmers needn’t fear price swings

To provide deeper insights into the rice sector in the context of 2026, VAN News conducted an interview with Do Ha Nam, Chairman of the Viet Nam Food Association (VFA).

Large-scale rice storage facilities are needed to regulate supply and demand

Rice export prices this year have declined slightly compared to last year, yet they still remain higher than those of Thailand and India. Why is this happening, sir?

In the first four months of this year, Viet Nam exported more than 3.3 million tons of rice, generating approximately USD 1.5 billion in revenue. Export volume declined only slightly by 2.3%, but the average export price dropped by nearly 11% to USD 468 per ton, significantly lower than the USD 508 per ton recorded in 2025. Nevertheless, the average price of Vietnamese rice remains considerably higher than that of many competitors in the global market. At this price level, profits are very low relative to production costs, which is also disadvantageous for farmers.

Notably, Viet Nam’s fragrant rice and high-quality rice varieties have continued to maintain prices above USD 500 per ton - much higher than the standard white rice segment exported by many other countries. This is seen as a sign that Vietnamese rice is gradually affirming its position in the premium-quality segment rather than competing on low prices as in the past.

The average export price of Vietnamese rice has already surpassed Thailand’s, and Viet Nam’s export volume has also exceeded Thailand’s. In the coming years, Viet Nam will certainly maintain this position. One reason is that Thailand is also facing difficulties as farmers there are reducing production.

However, from a strategic export perspective, we need to reassess the situation because there is a paradox: both the Philippine and Chinese markets are exerting strong pressure on prices. When prices are low, they purchase very large volumes, but when prices rise, they reduce imports because their reserve systems are quite strong. For the Chinese market, when rice prices were high in 2024, China imported only 285,000 tons. In 2025, when prices declined, imports increased to 600,000 tons, and this year imports could rise to 1 million tons if prices fall below USD 500 per ton.

The Philippines currently accounts for a large share of Viet Nam’s total rice exports. Any adjustment in purchasing plans by this market immediately affects domestic paddy prices. These two markets are expected to import around 5 million tons annually, while Viet Nam’s total rice exports amount to about 8 million tons per year, accounting for roughly 70% of those imports.

Vietnamese exporters and farmers often panic at the beginning of the crop season when prices are low and sell large quantities immediately. However, by the middle or end of the season, when prices rise above USD 500 per ton, there is no longer enough supply available for sale. At the moment, for example, fragrant rice is selling at high prices, yet there is insufficient volume to export. There are also cases in which businesses, supply chains, and traders engage in speculative stockpiling, causing significant disruptions in the commodity market.

Given the highly flexible and cyclical import strategies of major markets, what should Vietnam’s rice industry do to adapt and maintain favorable prices?

We are compelled to develop a flexible pricing strategy that can adapt to the cyclical import policies of major markets. When buyers pressure prices downward, the core solution is to establish a sufficiently strong stockpiling system, starting with farmers themselves.

Paddy rice can be stored for six months to one year if appropriate storage facilities are available. For fragrant rice, maintaining export prices above USD 500 per ton and paddy prices at around VND 7,000 per kilogram is entirely achievable. Farmers could then confidently store their rice instead of rushing to sell it.

This year’s situation clearly demonstrated the issue: at the beginning of the harvest season, paddy prices were only around VND 5,000 per kilogram, leading to massive sell-offs. But when prices later rose to VND 7,000 per kilogram, there was no rice left to sell. This shows that if temporary storage is properly organized, we can proactively regulate supply and demand, protect farmers’ interests, maintain paddy prices at profitable levels, and keep export prices above USD 500 per ton.

At the same time, businesses need to maintain market confidence, learn from past experience, and avoid panic selling when prices decline. Sales activities should be carried out under more favorable market conditions.

Regarding markets, besides traditional destinations such as China and the Philippines, greater attention should be given to Africa, where demand for Vietnamese fragrant rice is growing rapidly - potentially by 50% to 100% annually. Viet Nam should consider adjusting its market structure, reducing dependence on a few traditional markets, and expanding more aggressively into these promising destinations.

In the long term, Viet Nam needs to build a diversified rice-branding system and work toward establishing a national rice brand. Only when product quality and purity are maintained, without adulteration for short-term profits, can rice prices remain stable and sustainable.

If the market remains unstable, farmers will gradually abandon rice cultivation in favor of other crops. In that case, the country’s food security strategy and rice export strategy will inevitably be affected.

In your opinion, how should a rice reserve system be operated to maximize efficiency and preserve the value of Vietnamese rice?

The rice market operates according to market principles: for prices to remain high, supply must be lower than demand. To regulate supply and demand, commodities must be stored in reserve facilities. In this way, the reserve storage system itself becomes the market’s “regulating valve.”

In reality, several other Vietnamese agricultural sectors, such as coffee and pepper, have successfully used stockpiling mechanisms to regulate prices. The recent sharp increases in coffee and pepper prices were largely due to supply shortages, combined with farmers’ ability to hold back products and wait for better prices.

For rice, however, the key difference is that farmers often sell their paddy before harvest due to financial pressure. Therefore, the government needs to step in and establish support mechanisms that enable farmers to store their rice rather than sell it immediately.

Specifically, once farmers have dried their paddy, if market prices are low, they should be able to deposit their rice into reserve warehouses. These warehouses would coordinate with businesses and banks to enable farmers to receive advance payments based on the quantity of rice stored. This would allow them to maintain cash flow for daily expenses without being forced to sell at low prices. When market conditions improve, farmers could then sell their rice at more favorable prices.

In fact, this model already exists within Viet Nam’s rice sector, but it has been applied only to relatively well-off farming groups. Most farmers are still unable to participate due to the lack of adequate support mechanisms.

Therefore, it is essential to establish a mechanism with coordinated participation from the government, financial support from businesses, and partnership from banks. With such a framework in place, regulating supply and demand would become entirely feasible.

Viet Nam’s agricultural market is fundamentally part of the global market. Lessons from the coffee and pepper industries show that when supply is insufficient to meet demand and farmers are able to hold their products, the value of agricultural commodities rises significantly.

The goal is for farmers to make a living from rice cultivation

In your opinion, what is the greatest challenge facing Vietnamese rice exports today? Can the One Million Hectare (1MH) Project for high-quality, low-emission rice help address this challenge?

The biggest challenge facing Vietnamese rice exports today is the technical barriers imposed by demanding markets, particularly pesticide residue limits. These increasingly strict requirements mean that even though Vietnamese rice is of good quality, it still struggles to expand its market share in destinations such as the United States, the European Union, and Japan.

The 1MH Project is a very appropriate direction to gradually remove this bottleneck. However, the issue is not simply the size of the cultivation area. More importantly, we must clearly determine what type of rice we want to produce and which markets we intend to serve. If we only change farming practices to reduce costs, the benefits will be short-term. To create sustainable value, Viet Nam needs differentiated product and market strategies aimed at the high-value segment.

With current productivity levels, one million hectares can produce around 7 million tons of paddy per crop. With two crops annually, output would reach approximately 14 million tons of paddy, equivalent to around 8 million tons of rice. Meanwhile, Viet Nam exports only about 8 million tons of rice each year, with the remainder consumed domestically. If the one-million-hectare low-emission rice project achieves similar productivity, its output alone would nearly match the country’s total annual rice exports. The potential is enormous, but turning the idea into reality will require coordinated participation from local authorities, export enterprises, and relevant ministries.

Green, low-emission rice is especially well suited for developed markets such as Europe, the United States, and Japan, where consumers are willing to pay premium prices for environmentally friendly and safe products. While many other markets remain primarily price-sensitive, the right strategy for Vietnam is to focus on producing fragrant, high-quality, low-emission rice for middle- and upper-income consumers. If implemented effectively, the one-million-hectare initiative could truly become the “key” that enables Vietnamese rice to enter the high-value segment and overcome the long-standing challenges facing the industry.

From the remarkable achievements of Viet Nam’s rice industry over the past 50 years, how do you see the sector positioning itself on the global map over the next 5-10 years?

After 50 years of development, despite having relatively limited agricultural land, Viet Nam has achieved a remarkable success story in rice production, surpassing many countries with much larger cultivation areas such as the Philippines and Myanmar. Vietnamese agriculture is truly a story to be proud of.

However, if we organize the sector more effectively and adopt a more systematic strategy, the results could be even better. With the right direction, Viet Nam can absolutely maintain its position as the world’s second-largest rice exporter, behind only India.

At a time when global food security is becoming an increasingly important concern, Vietnamese rice plays not only a vital role domestically but also an important role for many countries around the world. Our success comes from sound policies, quality products, and many premium rice varieties that are favored by international markets.

That said, one important element is still missing: a strong national rice brand. To sustain long-term growth, Viet Nam must build a nationally recognized brand for its rice. Most importantly, rice farmers must be able to earn a stable living from their profession. Issues related to pricing, consistent product quality, and sustainability must be addressed simultaneously if the rice industry is to develop solidly in the future.

Thank you very much for sharing your insights!

$ 1 = VND 26,389 - Source: Vietcombank.