Vietnam encounters barriers exporting rice to China

Vietnam’s rice export price has unexpectedly surpassed Thailand’s prices, but the good news has been overshadowed by China’s higher import tariff on sticky rice and tighter control over imports.

According to the Ministry of Agriculture & Rural Development (MARD), in July 2018, Vietnam exported 382,000 tons of rice, worth $195 million, raising the total rice exports in the first seven months of the year to 3.9 million tons, worth $2 billion. 

This represented a 12.2 percent increase in quantity and 29.2 percent in value compared with the same period of 2017.

The average rice export price in the first half of 2018 was $508 per ton, up 14.2 percent compared with the same period last year.

After a tough year in 2017, Vietnam’s rice exports have bounced back since the beginning of 2018, increasing sharply in both quantity and value. 

While the export prices of all other countries decreased in June 2018, Vietnam’s 5 percent broken rice could be sold at $450 per ton, higher than Thai rice of the same kind ($435 per ton) and Indian rice ($410).

While the export prices of all other countries decreased in June 2018, Vietnam’s 5 percent broken rice could be sold at $450 per ton, higher than Thai rice of the same kind ($435 per ton) and Indian rice ($410).

This was breaking news for the rice export community. MARD’s Deputy Minister Ha Cong Tuan, when meeting the press, said Vietnam’s export price is on the rise thanks to the higher proportion of high-end and fragrant rice, which account for 80 percent.

However, rice exporters have been warned of difficulties ahead as China unexpectedly raised the import tariff on non-quota sticky rice from 5 percent to 50 percent.

As a result, sticky rice exports to the market dropped sharply, as did the export price, from $475-485 per ton to $425-435.

Vietnam’s rice exports also bear stricter control by Chinese agencies which have also raised the plant quarantine standards for Vietnam rice exporters.

MARD reported that in the first six months of the year, Vietnam was the biggest rice market of Vietnam which consumed 26.8 percent of total exports (891,700 tons, worth $474.8 million).

For scented rice, with export value of $472.6 million, accounting for 26.5 percent of total exports, the major markets were China, Ghana and Iraq. For sticky rice, China remained the biggest consumer, accounting for 81.6 percent.

Analysts predicted big opportunities for Vietnam to boost exports in the last months of the year as demand from major markets such as the Philippines and the Middle East is rising. 

However, they also warned of difficulties Vietnam will meet when exporting to China. They said the export price may not remain at a high level because of the appreciation of the US dollar.