Thailand, India, Vietnam: Rice Crisis Forges New Trade Pact
The global rice market faces turbulent times, with falling prices prompting major exporting nations to collaborate. Thailand is leading an effort to stabilize the market and support struggling farmers by engaging with India and Vietnam, fellow rice-exporting powerhouses, to manage oversupply and mitigate plummeting prices. This follows protests by Thai farmers over sharply declining incomes, demanding government intervention.
The situation is particularly precarious for Thailand, the world’s second-largest rice exporter. According to Commerce Minister Pichai Naripthaphan, discussions are underway with India and Vietnam to reduce competition and achieve a more balanced global pricing structure. This cooperation aims to ensure stable farmer incomes across the region, which are severely impacted by the price slump. While talks have begun, Mr. Naripthaphan indicated a further meeting is needed to solidify actionable strategies.
The urgency is underscored by a drastic 30% year-on-year drop in Thailand’s paddy prices, reaching an average of 8,600 baht per tonne last month, according to the Commerce Ministry. This sharp decline has sparked widespread discontent among Thai farmers, demanding government support to bolster prices and protect their livelihoods. Adding to the pressure, India’s resumption of rice exports—India is the world’s largest exporter—is projected to significantly impact Thailand’s export volume, with the ministry forecasting a 24% decline to 7.5 million tonnes this year.
Vietnam, the third-largest rice exporter, faces similar challenges. A recent government document reveals Prime Minister Pham Minh Chinh directed the Trade Ministry to aggressively pursue increased rice exports to key markets, including the U. S., China, the European Union, and Japan. This strategy aims to address Vietnam’s growing oversupply, exacerbated by weak global demand and cautious purchasing by major importers. To provide immediate financial relief to businesses, the government also instructed the central bank to extend loans for rice stockpiling. The document acknowledges the complex dynamics of the current market, highlighting oversupply coupled with reduced demand.
Vietnam’s declining export revenues reflect the global market shift, influenced by increased supply from India and Indonesia’s push to boost domestic production. The benchmark price for 5% broken rice plummeted 19% this year, falling from $481 per tonne at the end of 2024 to $389 (13,000 baht) per tonne, according to the Vietnam Food Association. Although export volumes for the first two months of 2025 increased by 18.9% compared to the same period last year, reaching 1.24 million tonnes, the value of these exports decreased by 4.9%, totaling $675 million.
This confluence of increased supply, decreased demand, and subsequent price drops paints a challenging picture for the global rice market. The collaborative efforts of Thailand, India, and Vietnam represent a crucial step towards addressing these issues and establishing a more sustainable and equitable market for all stakeholders, particularly rice farmers. The effectiveness of these collaborations and their impact on global rice prices will be closely monitored in the coming months.
