Mekong Delta traders sell rice on streets as prices plummet

Over the last month Nguyen Thi Lan, a trader based in Tien Giang Province’s Cai Lay town, has been selling the grain at VND11,800-15,000 (US$0.46-0.6) per kilogram on streets and occasionally in markets in her hometown and neighboring Dong Thap Province.

She says: "Every day my husband and I sell out a whole truck of rice, sometimes within just an hour. So far we have sold several hundred tons."

She usually buys paddy from farmers before the Lunar New Year, processes it and sells the rice to exporters.

But demand has plummeted this year and so exporters are only buying small quantities, prompting her to make roadside cut-rate sales to cut her losses.

"I am not making any profit at these prices, but if I keep it in storage and prices fall further, I will lose even more."

Consumers buying rice from Nguyen Thi Lan's truck. Photo by VnExpress/Ngoc Tai

Another trader, Tran Thanh, has been selling a few hundred 50-kilogram bags of rice per day for VND600,000-750,000 each at Tan Hao Market in Ben Tre Province.

"With stock piling up and exports struggling, selling directly [to consumers] at low prices is the only way to recoup my capital," he says, adding that he has been traveling around the region and selling at each market for a week or so.

The prices offered by these traders, of 20-40% below market rates, have attracted plenty of buyers.

Tran Thi Tuyet of Dong Thap’s Cao Lanh District has bought three 50-kilogram bags and plans to buy more. She says she has not seen rice this cheap in the last year or so.

"Retail prices are still high and unlikely to decrease anytime soon. Since I found cheap rice, I bought it to store for later, saving a considerable amount of money."

Bags of rice being sold on the roadside near Tan Hao Market in the Mekong Delta province of Ben Tre. Photo by Minh Bang

Nguyen Vinh Trong, sales director of Viet Hung, a company in Tien Giang that processes and trades rice, says exports have been sluggish.

Last month shipments of the grain to Indonesia, Vietnam’s second largest export market, fell 98% year-on-year to 651 tons as the country pushed for food self-sufficiency.

The Philippines, another large market, also scaled back purchases amid abundant stockpiles.

The price of Vietnam's 5% broken rice on export markets was $395 per ton on Feb. 14, the lowest in nine years and lower than the prices obtained by other top exporters India, Thailand and Pakistan.

Exporters are waiting to see if prices recover and so are not in a rush to stock up right now, Trong says.

Meanwhile, data from the Vietnam Food Association shows that paddy prices have decreased by 40-50% from a year ago to VND5,400-9,500 per kilogram depending on the variety.

On the retail market, it may take two or three months for prices to fall as a result of all this, Trong says.

The volumes the roadside traders are selling are not large enough to affect the market, he says.

"The sight of rice being sold on the streets will disappear once retail prices drop."

Vietnam exported a record nine million tons of rice last year thanks to India’s rice export ban. But with the ban now lifted and global supply rising, the food association expects exports to drop sharply to 7.5 million tons this year.