Philippine ban worries VN rice firms

11.04.2017

The recent suspension of rice importation by the Philippines, a major import market of Viet Nam’s rice, has sparked concern among local rice exporters.

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Sacks of rice loaded at the Sai Gon Port. The Philippines represented the second largest buyer of Vietnamese rice in the first two months of the year.

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 was 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.

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

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 was preparing for an export order of around 20,000 tonnes from the Philippines, and did not know what to do if that country stopped importing.

“Viet Nam 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.”

Lam Anh Tuan, director of Thinh Phat Food Co Ltd of Ben Tre Province, said the Philippines had 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 were falling, but paradoxically 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, he said.

Dang Thi Lien, director of Long An Foodstuff Co Ltd, said 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.

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

The Philippines’ National Food Authority said last month the country needed 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).

Viet Nam 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 per cent in volume and 17.3 per cent in value.


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