Vietnam to exceed the rice export target for 2017

With positive results from rice export contracts in the remaining months of 2017, the Vietnam Food Association (VFA) has increased the rice export target from 5.2 million tons to 5.6 million tons.

Comparing to 2016 and the first few months of 2017, as of May, Vietnam’s rice export has increased significantly with the increase number of rice export contracts. According to the VFA, in the first 9 months, Vietnam has exported 4.57 million tons of rice, up 20.8% in term of quantity and 18.6% in term of value (equivalent to 2.02 billion USD) compared to the same period of last year. As such, China continue to be the leading export market of Vietnam.

In particular, August is seen as a breakthrough period for Vietnam’s rice export with an increase of 70% in quantity and 56.7% in term of Free on board (FOB). The number of rice export contract has increased in recorded with 842,000 tons, up 207% compared to July 2017 and 115% compared to the same period of last year. The majority of rice export contract are for sticky rice, white rice, and high quality rice to China; 25% of high quality rice to Philippines, Africa; Japonica rice to the Pacific region.

According to VFA, the increase in both quantity and quality of rice export compared to the same period of 2016 is thanks to the increase export in traditional markets such as China, Malaysia, Philippines and Bangladesh. 

Specifically, in Malaysia, Vietnamese companies have signed contract of exporting 150,000 tons; in Malaysia, Vietnamese companies have signed contract of exporting 250,000 tons; in Philippines, Vietnamese companies have signed contract of exporting 175,000 tons. New markets with high potential such as Australia and some West Asian countries also show significant increase in rice export. 

It is expected that in the coming time, rice export will continue increasing when the Bangladesh Food Ministry announce the bidding for importing 50,000 tons of rice Non-Basmati. If Vietnamese companies win the bidding, it will continue contributing to the rise of Vietnam’s rice export. In May, the governments of two countries have signed the Memorandum of Understanding (MOU) on rice trading, which is valid for 5 years since the signing ceremony (for period 2017 - 2022). 

As such, in each year depending on the demand and market price, Vietnam will export to Bangladesh the amount of rice up to 1 million tons. After the signing ceremony, Bangladesh has announced the intention to buy 250,000 – 300,000 tons of Vietnam’s white rice immediately and additional 500,000 tons since May to the end of 2017. In addition to Bangladesh, Philippines also increase the amount of rice import in accordance with the mechanism of Minimum Access Volume (MAV) for 2017 – 2018. Therefore, the amount importing rice from Vietnam in accordance with MAV mechanism is 293,100 tons, which is equivalent to Thailand. China is also expected to continue importing rice from Vietnam in the remaining months of 2017, with the focus on sticky rice, white rice and high quality rice to for high demands in the end of the year. 

With positive results from rice export contracts in the remaining months of 2017, the Vietnam Food Association (VFA) has increased the rice export target from 5.2 million tons to 5.6 million tons, while at present, Vietnam has achieved 82% of the plan for 2017. In order to create favorable conditions for rice export, the Ministry of Industry & Trade has issued the development strategy for Vietnam’s rice export for period 2017 – 2020, with vision to 2030, which is aimed to increase the added value for rice export.