China No Longer an Attractive Rice Market for Vietnam

26-Jul-2019 Intellasia | VCCI News | 6:02 AM Print This Post

The first months of 2019 witnessed a significant drop in export value of many agricultural products of Vietnam to China, especially rice, because China is tightening informal export quota and limiting this import.

Worrying export decline

According to the Ministry of Industry and Trade, rice shipments to China dropped in 2018. Statistics showed that 2018 rice export value to China plunged by over 31 percent over 2017.

Vietnam’s rice export to China continued to suffer a steep decline, shrinking 75.4 percent in volume and 75.2 percent in value year-on-year to 223,078 tonnes and $111.33 million in the first five months of 2019, accounting for nearly 8.1 percent of the country’s rice shipment and 9.4 percent of the total value.

The export rice price to the Chinese market also decreased by 6.3 percent to $499 per tonne. China slid from the No. 1 rice export position to No. 3 in the first five months of this year (after the Philippines and Malaysia).

The shrinkage was largely attributed to China’s barriers to rice exported from Vietnam, including its import duty on sticky rice rising from 5 percent to 50 percent, or to its tightened broken rice import control. China significantly changed regulations on rice imports, including tariff regulation and strict informal export control. Chinese customs authorities also strictly enforced measures of quality control and traceability for imported agricultural products. Besides, China is trying to diversify trade and set quotas with Cambodia and Myanmar.

According to industry experts, policy barriers are the primary cause to Vietnam’s falling rice exports to China, rather than the latter’s economic slowdown or yuan devaluation.

Informal export restriction

Deputy minister of Industry and Trade Tran Quoc Khanh said that Chinese customs authorities tightened informal export quotas to bring back cross-border trade conducted by residents of both sides to the true sense. Therefore, to meet market requirements, businesses and people themselves have to change their production methods.

Le Thanh Hoa, deputy director of the Department of Agricultural Product Processing and Market Development under the Ministry of Agriculture, said that the Ministry of Agriculture and Rural Development warned in advance of China’s import tightening and abolition of informal export quotas. However, many localities and businesses paid little heed to promoting farming region code development or traceability code registration.

Le Hoang Oanh, director of the AsiaAfrica Market Department under the Ministry of Industry and Trade, said, businesses need to change their transaction forms with and their approaches to the Chinese market, focusing on official trade that matches international practice.

Besides China, Vietnam can access many potential rice import markets like the Philippines, Indonesia, Belgium, Malaysia, Ghana, Iraq, Ivory Coast and Hong Kong (China). Their imports of Vietnamese rice jumped high in 2018.

Rice exporters need to utilise existing competitive advantages to consolidate and develop near and traditional markets that Vietnam can serve well, especially Asian countries, which account for 70 percent of Vietnam’s rice exports, followed by Africa with 15 percent.


Category: Economy, Vietnam

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