In late April, rice prices in many provinces and cities rose sharply, causing great concern to the public. The Government took immediate measures to stop the buying spree and rice prices gradually fell. What is the cause behind the rapid fluctuations on the domestic rice market and what lessons have been learnt? 

Between April 24-28, rice prices increased sharply by between 40-60 percent, sparking a buying spree in major markets such as Ho Chi Minh City, the Mekong Delta and in south-eastern provinces. Rice agents refused to sell the product while supermarkets were short of rice to sell. The media covered the food crisis in the world and the scarcity of rice in several places across the country.

The fear reached its climax on April 26 when television stations ran footage of American citizens rushing to buy rice at supermarkets. A popular local newspaper front-paged the picture of a large supermarket in Vietnam with the sign “No rice for sale”. 

Consequently, rice prices rose sharply on a daily, even hourly basis, and local residents began to rush to rice agents and supermarkets. There was growing concern that soaring rice prices would drive the consumer price index up and put more pressure on the national economy. 

One day later, the Government announced that Vietnam’s rice reserves still met the requirements for local consumption and export, that rice exports do not affect local consumption and that the Mekong Delta – which is the country’s largest rice granary – is predicted to have a bumper crop this year.

The Government also asked the Ministry of Agriculture and Rural Development to regulate the domestic rice market. As a result, rice prices have gradually declined since April 28.

The sudden changes in the market were attributed to the Government’s urgent and effective measures in line with the market economy. The Government held that the rice price fever had stemmed from socio-psychological factors and affirmed that national rice reserves are big enough for local consumption and export as Vietnam will have a bumper rice crop this year

In the meantime, the Government said some media agencies continued reporting on the global food crisis and the temporary short supply of rice in HCM City without any analysis or comments. This information was very confusing to local residents.

These media agencies should have known that the impact of the global food crisis on Vietnam was small as the country was the world’s second largest rice exporter fully capable of keeping supply and demand in balance. In addition, unlike oil and gold, Vietnamese rice is not directly affected by global fluctuations. 

As the recent rice price fever was caused by socio-psychological factors, media agencies should be more responsible for their information with which the relevant ministries and agencies could make accurate forecasts and come up with rapid and effective measures to stabilise any unexpected market fluctuations.