Surpassing Thailand, Vietnamese rice holds the number 1 position when exporting to the Philippine market.
Phung Van Thanh, Trade Counselor of the Vietnamese Embassy in the Philippines, said that rice is both a traditional product and a key export item that has created a solid position in the Philippines. Currently, Vietnam mainly exports DT8 rice, 5451 rice, and 504 glutinous rice to the Philippine market.
In previous years, the Philippines bought rice through Government-to-Government (G2G) negotiations, and Vietnam always had to compete with Thailand, two major rice exporting partners to the Philippines. However, since 2019, when the Philippines enacted and implemented Law No. 11203 allowing free import and export of rice and removing quotas and restrictions on rice imports, Vietnam has surpassed Thailand to become an important rice supplier, always holding the No. 1 position in rice exports to the Philippine market.
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| In the Philippine market, Vietnamese rice has more advantages than other markets. Illustrative photo |
The trade office believes that in the Philippine market, Vietnamese rice has more advantages than other markets due to:
Firstly, many Vietnamese rice enterprises have had long-term relationships with Philippine rice importers, creating prestige and trust in rice export.
Second , Vietnamese rice has moderate quality, suitable for the tastes and consumption habits and meets the diverse needs of Philippine consumers, from the large middle and low income population to the wealthy classes, and is affordable, so it is competitive.
Third , Vietnam's rice supply is stable, both in quantity and price, and can meet the Philippines' annual import demand. Not to mention, the geographical distance between Vietnam and the Philippines has many advantages, so the cost is low and transportation is convenient.
Fourth , Vietnam also takes advantage of the bilateral and multilateral trade agreements that both sides participate in (Bilateral Agreements, Agreements within ASEAN, ASEAN Agreements and partners such as ATIGA, RCEP...), while the Philippines' non-ASEAN partners such as India, Pakistan... do not have them.
With the above advantages, in recent years, Vietnam's rice exports to the Philippine market have grown impressively.
For example, in 2019, Vietnam's rice exports to the Philippines reached over 2.1 million tons for the first time. By 2020, this figure was over 2.2 million tons, and the export turnover exceeded the 1 billion USD mark for the first time. In 2022, the Philippines imported over 3.826 million tons of rice, of which about 3.2 million tons were imported from Vietnam, accounting for nearly 85% of the total rice imports of the Philippines.
By 2023, the Philippines will import 3.567 million tons of rice. Of which, the amount of Vietnamese rice exported to this market will reach 3.1 million tons, accounting for nearly 87% of the total rice imported by the Philippines.
" With the average annual rice import volume accounting for about 85% of the total rice import volume, for the Philippines, Vietnamese rice is not only a regular import item for consumption, but also an important item to ensure food security and macroeconomic stability" - Vietnam Trade Office in the Philippines commented and evaluated.
Close to the market, sustainable business
According to forecasts from the Trade Office, although there will be many difficulties, in the coming years, Vietnamese rice is expected to maintain its number 1 position in the Philippine market. The recent rice export results are Vietnam's success in the Philippine market and there is still a lot of room and opportunity for Vietnamese rice exporting enterprises to continue to exploit and expand the market, increasing export turnover in this market.
According to a report by the Agricultural Export Administration - US Department of Agriculture (USDA), the Philippines' rice import volume in 2024 will be at 4 million tons, instead of the previous forecast of 4.1 million tons. USDA lowered its forecast for the Philippines' rice import volume because the Philippines' domestic rice production is expected to meet the slight increase in domestic consumption demand. However, the opportunity for the Vietnamese rice industry in this market is still very large.
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| Although there are many export advantages, businesses need to proactively seek partners, focus on rice quality, build brands... Illustrative photo |
In recent years, the Philippines has always been an important rice export market for Vietnam. Therefore, in order to prepare for market fluctuations in 2024, Mr. Phung Van Thanh recommends that domestic rice exporting enterprises, in addition to taking advantage of new opportunities in new markets, still need to always pay attention to maintaining Vietnam's No. 1 position in rice exports in the Philippines market. Because currently, Thailand is also looking for ways to increase output and market share of rice exports to the Philippines and compete with Vietnamese rice.
Therefore, the Trade Office recommends that Vietnamese rice exporting enterprises continue to coordinate well with the Ministry of Industry and Trade, the Embassy and the Trade Office of Vietnam in the Philippines to implement programs to promote, propagate and advertise Vietnamese rice products.
At the same time, continue to maintain and ensure stable rice quality, constantly improve the quality of exported rice products, thereby contributing to increasing the export value of Vietnam's rice products to the Philippine market.
On the other hand, the Trade Office recommends that exporting enterprises need to diversify their rice export products, not only focusing too much on high-quality rice products serving high-income people, but also need to exploit the potential of medium-quality and lower-quality rice to serve a large number of people with middle and low incomes.
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