Philippine ban worries Vietnamese rice exporters

Last week, Philippine Agriculture Secretary Emmanuel Pinol said President Rodrigo Duterte had ordered a temporary halt to imports since local farmers had achieved a large rice harvest.

Duterte had said that while there is a need to import rice for buffer stocks, the importation must not be done during the peak harvest season since this would affect local farmers, Pinol said.

The Philippines had been the second largest buyer of Vietnamese rice in the first two months of the year.

Workers load rice for export at Saigon Port

Tran Thi Kim Nhung, director of the Dong Nai-based Kim Dong Thuan Co Ltd, which supplies rice to companies to export to the Philippines, told Nguoi Lao Dong (Labourers) newspaper her company is preparing for an export order of around 20,000 tonnes from the Philippines, and does not know what to do if that country stops importing.

"Vietnam lacks high-quality rice but has an abundance of cheap, low-grade rice, the kind that the Philippines usually imports. If the market stops imports, finding a substitute market will be extremely difficult," she said.

Lam Anh Tuan, director of Thinh Phat Food Co Ltd of Ben Tre province, said the Philippines has changed its rice import management mechanism, switching from Government import to the private sector bidding for import quotas and increasing domestic supply.

Global rice prices are falling, but paradoxically prices have increased in the Vietnamese market, making its rice less competitive. If businesses cannot export, rice prices would definitely drop after the next crop, hurting farmers, he said.

Dang Thi Lien, director of Long An Foodstuff Co Ltd, said she is in close contact with importers in the Philippines, and knows that the country has been hit by natural disasters and suffers from a rice shortage.

Duterte’s order to suspend rice imports from Vietnam would undoubtedly have a huge impact on Vietnam’s rice exports, she said.

According to the Vietnam 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 Vietnam in 2015, accounting for 17.2% of Vietnam’s exports. Last year it fell to just 400,000 tonnes, or 8.18% of exports.

VFA said businesses and official agencies should keep a close eye on the Philippines market to map out a suitable strategy as there is some contradictory information from the market.

The Philippines’ National Food Authority had said last month the country needs to import 250,000 tonnes of rice as soon as possible.

The VFA also forecast that the Philippines could resume imports in the period between rice crops (May-July).

Vietnam exported 1.28 million tonnes of rice for US$566 million in the first quarter of the year, a year-on-year decrease of 18.1% in volume and 17.3% in value. China was the largest buyer.