Rice exports to China face difficulties According to the Ministry of Agriculture and Rural Development, in the first 11 months of 2024, Vietnam's rice exports reached nearly 8.5 million tonnes and generated 5.31 billion USD, an increase of 10.6% in volume and 22.4% in value compared to the same period last year.
Not only has the price risen significantly compared to previous years, but the current price of Vietnamese rice is also among the highest globally. As of December 4, 2024, the price of Vietnam's 5% broken rice was 517 USD per tonne, far surpassing Thailand (499 USD per tonne), India (451 USD per tonne), and Pakistan (453 USD per tonne).
However, the picture of Vietnam's rice export market is not entirely bright, as rice exports to China, a traditional market, plummeted by 71.3% compared to the same period in 2023.
Previously, the export value of Vietnamese rice to China remained relatively stable from 2012 to 2016. Then, in 2017, rice exports to this market experienced a sudden surge, reaching nearly 1.03 billion USD and accounting for nearly 40% of the total export value.
However, the export turnover of this commodity to the Chinese market unexpectedly dropped to 240.3 million USD in 2019 but quickly recovered in subsequent years.
Since the beginning of this year, rice exports to China have faced greater challenges.
According to experts, the decline in rice exports to this market is attributed to China raising its quality standards for imported rice. High-end rice varieties such as fragrant rice and premium rice, including ST24, now face stringent requirements in terms of quality and packaging design. Meanwhile, for processed rice, China is only importing low-cost rice in large quantities.
Additionally, Vietnamese rice is encountering fierce competition in the Chinese market from similar products from Thailand and Cambodia. These countries are among the world's leading rice exporters, offering not only high-quality rice but also visually appealing packaging.
Economic expert Vu Vinh Phu further analysed that China has been implementing policies in recent years to gradually enhance its domestic food supply towards ensuring food security. As a result, China's domestic rice production has been relatively strong in recent years.
Moreover, high-quality plain rice continues to account for a significant proportion of Vietnam's rice export structure, whereas China predominantly uses sticky rice in its cuisine.
"Regarding plain rice, the high-quality varieties added to the premium rice segment are mainly imported from Thailand or Cambodia because these countries have heavily invested in branding and packaging. Meanwhile, certain common rice types used for blending with local varieties or processed and packaged under Chinese brands are not Vietnam's strengths, which lie in high-quality fragrant rice," analysed expert Vu Vinh Phu.
He also noted that Vietnam's rice export prices have risen considerably in recent times. While this increase has boosted overall export turnover, it has made Vietnamese rice less competitive in the Chinese market.
The Vietnam Food Association (VFA) explained that China has been limiting the number of rice exporters permitted to operate in its market. Currently, only 21 Vietnamese companies are allowed to export rice to China out of the approximately 161 Vietnamese rice enterprises that have been licensed.
Efforts to seek opportunities to increase rice exports to China
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Investment is needed in specialty rice varieties and building a strong brand are crucial for exports to China. |
Nong Duc Lai, Trade Counsellor of Vietnam in China, stated that China, with its large population, has a daily rice consumption habit ingrained in its food culture. As a result, the demand for rice in this market is substantial. China is also the largest rice producer in the world with the highest production volume globally.
Notably, ST rice is currently gaining popularity in the Chinese market as it has been repeatedly recognised as the best rice in the world. Therefore, businesses need to maintain, promote, expand, and take advantage of opportunities to build a brand for Vietnamese rice products in this high-potential market.
To promote rice exports to China, in early December, two units from the Ministry of Industry and Trade, including the Import-Export Department and the Trade Promotion Department, organised a rice trade promotion event in China.
As part of the event, the working delegation met with the Department of Commerce of Hunan Province, the China Council for the Promotion of International Trade Shenzhen Municipal Committee (Guangdong Province), and the China Council for the Promotion of International Trade Hunan Sub-council. Additionally, trade activities were held to connect Vietnamese rice enterprises with Chinese businesses in Shenzhen as well as Changsha, Hunan Province.
In addition, the delegation also conducted field surveys and met with major companies in Shenzhen (Guangdong Province) and Changsha (Hunan Province) to explore opportunities for boosting rice trade between Vietnam and China, especially between Vietnam and Shenzhen/Hunan. The aim was to connect businesses from both countries to promote exports.
During the meetings, both sides provided information on the mechanisms and policies related to agricultural product imports and exports, specifically regarding rice. The delegation introduced Vietnam’s potential, production capacity, and rice export capabilities, highlighting the diversity of rice varieties and the dynamism of Vietnamese businesses in innovation. They also stressed the application of advanced science and technology in production to continually improve product quality and meet market demands.
The working delegation informed their counterparts that the Ministry of Industry and Trade of Vietnam has granted Export Rice Business Certificates to 161 traders.
In particular, the trade seminar held in Shenzhen (Guangdong Province) and Hunan Province attracted nearly 100 delegates from nearly 40 businesses across various regions. The Vietnamese business delegation also visited several factories, warehouses, transport companies, and large rice importing businesses in China. They explored the distribution, retail, and consumer consumption systems in China to aid in developingdirect market penetration strategies and increase market share in this key market.
Nong Duc Lai advised that Vietnam's rice exports should leverage and take full advantage of its strengths in the Chinese market. Over the years, Vietnam has established strong, traditional business relationships with China and needs to maintain its share of Vietnamese rice in China’s total rice imports.
Furthermore, he emphasised the importance of diversifying trade promotion efforts to penetrate potential regions within China. Building a recognisable rice brand is especially crucial, as it would make it easier for the market to identify and choose Vietnamese rice products.
