Vietnam, the world’s third largest rice supplier, failed to reach the annual export target. This is the first time in eight years that the rice shipments have dropped to under five million tons. According to the latest report from the General Department of Customs, Vietnam exported 4.8 million tonnes of rice in 2016, down nearly a million tonnes against 2015, failing to meet the annual target of 5.4 million tonnes. Vietnam earned only USD2.1 billion from rice exports in 2016, down from USD2.8 billion in 2015 and USD2.9 billion from 2014. It exported 4.8 million tonnes of rice in 2016, down nearly 2 million tonnes against 2015. Vietnam’s rice exports were estimated at 6.6 million tonnes in 2015; 6.3 million tonnes in 2014. The association also added that Vietnam had faced strong competition from Thailand and India, the world’s largest rice exporters. Thailand announced plans to clear its state stockpiles, estimated at around 9 million tonnes last August, making Vietnamese rice less competitive in major markets across Asia.
Excessive supplies from major rivals like Thailand, Pakistan and India and smaller orders from key import markets such as China and the Philippines then made the situation tougher for Vietnamese exporters. India also won many big rice export contracts from many countries, including China, the Philippines as well as those from Africa and the Middle East. Many South-east Asian countries such as Cambodia, Laos and Myanmar have also boosted their rice exports. Experts said that another key factor is that Vietnam has long been focused on quantity rather than quality, which has actually backfired in terms of the country’s rice exports. Vietnamese rice exporters are also faced with the risk of being banned from the United States after a series of pesticide residue scandals. The ministry had said earlier this year that prolonged drought and saltwater intrusion damaged crops in the Mekong Delta, Vietnam’s main rice basket. Heavy downpours and flooding in the central region throughout the year brought more farming woes.
The Vietnam Food Association attributed the lower rice exports to the drastic fall in the country’s key import markets such as China, the Philippines, Malaysia and Indonesia. In 2016, Vietnam exported 1.7 million tonnes of rice to China, down from 2.1 million tonnes in 2015. Meanwhile, the figure to the Philippines reached 395,000 tonnes and 1.1 million tonnes for 2016 and 2015 respectively. Going forward, import demand of these two major importers, China and the Philippines, is expected to rebound next year, making Vietnam push export sales.