The recent suspension of rice imports by the Philippines, a major import market of Viet Nam’s rice, has sparked concern among local rice exporters. Last week, Philippines Agriculture Secretary Emmanuel Pinol said President Rodrigo Duterte had ordered a temporary halt to imports since local farmers had achieved a large rice harvest. The Duterte administration vowed to allocate all the tariffs collected from rice imports for programs aimed at helping farmers cut production cost, according to the Philippine Development Plan (PDP) 2017-2022.
This ban by the Philippines has raised concern among the Viet Nam’s rice exporters, which is the major import market of Viet Nam’s rice. Tran Thi Kim Nhung, executive of a Dong Nai-based Kim Dong Thuan Co Ltd, that reserve rice to companies to trade to a Philippines said that her association was planning for the trading of around 20,000 Metric Tonnes (MT) to Philippines, but did not know what to do if that nation stopped importing. “Viet Nam lacks high-quality rice though has a contentment of cheap, low-grade rice, a kind that a Philippines customarily imports,” she complained.
Global rice prices were falling, but on the contrary, prices had increased in the Vietnamese market, making its rice less competitive.” If businesses did not export, rice prices would definitely drop after the next crop, hurting farmers,” said Dang Thi Lien, Director, Long An Foodstuff Co Ltd. She further added that she was in close contact with importers in the Philippines, and knew that the country had been hit by natural disasters and suffered from a rice shortage. Duterte’s order to suspend rice imports from Viet Nam would undoubtedly have a huge impact on Viet Nam’s rice exports, she said.
According to the Viet Nam Food Association (VFA), rice exports to that country have fallen significantly in recent years. The Philippines bought nearly 1.13 million tonnes of rice from Viet Nam in 2015, accounting for 17.2 per cent of Viet Nam’s exports. Last year, it fell to just 400,000 tonnes, or 8.18 per cent of exports. However, the Philippines’ National Food Authority (NFA) had said last month that the country needed to import 250,000 tonnes of rice as soon as possible. Therefore the VFA urged the businesses and official agencies to keep a close eye on the Philippines market to map out a suitable strategy as there was some contradictory news in the market.