Vietnamese rice rises to become the world’s second largest

Vietnamese rice secures its niche market

The Thai Rice Exporters Association (TREA) recently announced that in the first half of 2025, Vietnam officially surpassed Thailand to become the world’s second-largest rice exporter, trailing only India.

Specifically, in the first six months of 2025, India exported 11.68 million tonnes of rice, up 36.5% from the same period last year. Vietnam followed with 4.72 million tonnes, an increase of 3.5%, while Thailand ranked third with 3.73 million tonnes, down 27.3%.

According to Mr. Do Ha Nam, Chairman of the Vietnam Food Association (VFA), amid global oversupply and a general decline in rice exports - where even Thailand, which had long held the second position, saw its output drop by over 30% year-on-year - Vietnam’s rice exports still managed to grow by 3.1% in volume.

In the first seven months of 2025, Vietnam exported 5.5 million tonnes of rice, earning USD 2.8 billion. Although Vietnam’s average export price of USD 514 per tonne has declined compared to recent years, it remains higher than that of other countries, reflecting significant progress. It is forecast that in 2025, Vietnam’s rice exports will reach nearly 8 million tonnes, maintaining its position as the world’s second-largest rice exporter.

According to Mr. Nam, Vietnamese rice has now established its market niche with varieties such as OM and ST25. In particular, ST25 rice is highly praised by overseas Vietnamese communities for its exceptional taste, embodying the idea that “love goes through the stomach” and contributing to enhancing the country’s image. Although the average export price of USD 514 per tonne is lower than in recent years, it still surpasses that of other countries.

However, Mr. Nam believes that for the rice industry to develop sustainably, Vietnam needs to boost exports to markets such as Japan, South Korea, and Africa, and penetrating these markets will require government engagement.

He added that the confidence to make breakthroughs in these markets comes from the establishment of a one-million-hectare specialized farming zone for high-quality, low-emission rice.

According to Mr. Bui Ba Bong, Chairman of the Vietnam Rice Sector Association (VIETRISA), when it comes to exports, the core still lies in production, and the foundation of that is the raw material zone. Vietnam holds a significant advantage with its leading rice production capacity in Southeast Asia, approaching world-class standards and achieving remarkable progress.

He emphasized that the “super raw material zone” – 1 million hectares of high-quality, low-emission rice in the Mekong Delta – is being implemented effectively. This model could be expanded to other regions, helping to maintain national food security while enhancing export capacity.

Pressure on Vietnamese rice from both external and internal factors

The Mercantile Exchange of Vietnam (MXV) assessed that Vietnam’s overtaking of Thailand in rice export volume was not a stroke of luck, but the result of a decade of investment in seed varieties, processing technology, and market strategies. This achievement increasingly reflects a shift from “exporting more” to “exporting with value,” creating a clear competitive advantage. However, to maintain its position, the Vietnamese rice industry must address certain bottlenecks, meet ever-higher quality standards, and avoid complacency that could slow momentum.

According to MXV’s analysis, the change in ranking with Thailand stems from two parallel trends. On one hand, Thai rice exports have plunged, with the country itself projecting an annual total of only 7.5 million tonnes - far below the 9.94 million tonnes in 2024. A greater risk comes from trade tensions with the United States, as Washington has threatened to impose a 36% tariff on Thai rice, pushing prices from around USD 1,000 per tonne to USD 1,400–1,500 per tonne. Such high prices have prompted many buyers to turn to more competitive suppliers, including Vietnam.

On the other hand, Vietnam has not only taken advantage of the “gap” in the market but also actively expanded its reach. With an average export price of USD 514–517 per tonne, Vietnamese rice is significantly cheaper than Thai rice, enabling deeper penetration into regions beyond its traditional markets.

However, numerous difficulties and challenges remain. The race between Vietnam and Thailand for the No. 2 spot on the global rice export map has lasted for many years. Thailand holds a long-standing brand advantage, especially in the premium fragrant rice segment, with its famous Hom Mali brand favored by many high-end markets. When favorable weather conditions exist, Thailand can quickly ramp up production, increasing competitive pressure in markets that Vietnam is currently tapping into.

In this context, maintaining second place poses a significant challenge for Vietnam. Even domestically, the rice industry faces considerable risks. The Mekong Delta - the country’s main export rice bowl - continues to be affected by saltwater intrusion, drought, and climate change, making yields vulnerable to fluctuations. Just one poor harvest could be enough to reverse the current growth momentum.

Although fragrant rice varieties such as ST24 and ST25 have made a strong impression, the “Vietnamese Rice” brand has yet to achieve global recognition or establish a clear position in the premium segment like “Hom Mali.” Without a strategic focus on brand building and deep processing, Vietnam will find it difficult to capitalize on opportunities in the value-added segment fully.

In addition, export management policies and technical barriers from demanding markets such as the EU and Japan remain significant challenges. In a scenario where global demand weakens or competitors aggressively cut prices, Vietnam’s price-based competitive edge would narrow. This calls for a long-term strategy that shifts the focus from increasing volume to enhancing product value.

According to the Mercantile Exchange of Vietnam, in the short term (the next 6–12 months), Vietnam can likely maintain its second-place ranking thanks to stable supply and existing contracts. However, in the medium term (1–3 years), if India continues to “flood” the market with rice or Thailand recovers production while adopting flexible pricing strategies, competition will intensify considerably. In such a situation, the only way to sustain an advantage will be through investment in branding, quality, and product diversification.

In the long term, the sustainable path must be a shift toward exporting high-quality rice, organic rice, full traceability, and building a national brand. Otherwise, the current second-place ranking could be nothing more than a brief “crest of the wave” amid a cycle of oversupply and global climate volatility.