Under the Vietnam-EU Free Trade Agreement (EVFTA) effective from August 1, the EU pledges to provide an annual rice quota of 80,000 tonnes to Vietnam and completely liberalise trade in broken rice. After three to five years, tariffs on rice products will be slashed to zero %.
Tran Thanh Hai, deputy director of MoIT’s Import and Export Department, said that in 2019, Vietnam saw modest earnings of US$10.7 million from rice exports to the EU because of high import tariffs in this market.
At present, the EU’s import tariffs for Vietnamese rice is EUR175 (US$198) per tonne of milled rice, EUR65 per tonne of broken rice and EUR211 per tonne of paddy.
"The rice quotas of 80,000 tonnes to Vietnam according to the commitments in the EVFTA is an opportunity for Vietnam to enhance its rice exports to this market, which has annual demand of about 2.5 million tonnes of rice," Hai told the Hai Quan (Customs) newspaper.
Meanwhile, the EU also sets a range of conditions for those quotas such as origin certificates on Vietnamese rice. The rice exported to EU must have authenticity certificates issued by Vietnamese authorities.
To take advantage, the Ministry of Agriculture and Rural Development (MARD) and the MoIT are compiling a draft decree guiding the registration process for certification of rice categories exported to the EU to submit to the Government for approval.
According to this draft, eligible rice varieties exported to the EU must meet Vietnam’s technical standards and regulations on quality, region cultivating rice varieties, and processes of harvesting, preserving, grinding, milling and packaging rice.
Pham Thai Binh, general director of the Trung An High-tech Agriculture Joint Stock Company in Can Tho City, said Vietnamese rice reaching those requirements to enter the EU with low tariffs would help Vietnam increase its rice exports in the future.
"When the tariff for Vietnamese rice is reduced to zero %, it gives local rice products more advantages in competing with rice from Cambodia and other countries in the EU market," Bình said.
The agriculture sector expects to significantly increase exports of many key products until 2025 thanks to the EVFTA, such as rice (up 65%), sugar (8%), pork (4%), forest products (3%), and cattle and poultry meat (4%).
However, those products must overcome many trade barriers of the EU, such as technical barriers on origin, product quality and intellectual property protection.
Therefore, experts said that local farmers and businesses in the agriculture sector have to improve production capacity and product quality, find export markets and build brands for agricultural products.
In the long term, strict regulations on quality standards for exported Vietnamese agricultural products, including rice, would force the agriculture sector to undertake comprehensive restructuring in production and business.
According to MARD, Vietnam earned US$1.71 billion from exporting nearly 3.5 million tonnes of rice in the first half of this year, up 17.9% in value and 4.4% in volume year-on-year. In June alone, 409,000 tonnes of rice worth US$207 million was shipped abroad.
The Philippines was the top buyer between January and May, importing 1.3 million tonnes of Vietnamese rice worth US$598.6 million, or 40% of total rice exports. They were up 23% in volume and 42% in value from a year earlier.
During the first five months, markets to which the value of rice exports enjoyed the strongest year-on-year growth were Senegal (18.3-fold), Indonesia (2.9-fold), and China (2.3-fold).
Meanwhile, rice export prices increased 13% from the same period last year to average US$485 per tonne.