Vietnam exported about 4.54 million tonnes of rice for nearly 2 billion USD in the first eight months of this year, up 0.3 percent in volume but down 14.9 percent in value from a year earlier, according to the Agro Processing and Market Development Authority (Agrotrade).

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In August alone, the country shipped abroad 591,000 tonnes of rice for 265 million USD, the agency said.

Strong growth were seen in Ivory Coast (64.5 percent), Australia (63.9 percent), Hong Kong (China) (43.5 percent), and Saudi Arabia (31.3 percent) during the January – August period.

The average export price in the eight months reached 433 USD per tonne, down 14.7 percent year on year.

The Philippines outstripped China to become Vietnam’s largest buyer during the reviewed period, accounting for 34.5 percent of the total rice exports or 1.46 million tonnes. Its rice imports from Vietnam increased 3.2 times in volume and 2.7 times in value from the same period last year.

Vietnam’s rice exports to China plunged 66 percent year-on-year to 350,000 tonnes, pushing the neighbouring country to the second position.

Local traders said China's demand for rice is still high, but Chinese importers have cut back on purchases from Vietnam because of new technical barriers imposed by the Chinese government. In addition to increases in import duty, China has strengthened quality control of goods and inspection of food safety.

At present, Vietnam has 21 enterprises which have received permission to export rice to China. From 2019, China also required licensed enterprises to register total capacity of their factories and they will not be allowed to export more than that. Their licences would be revoked if the volume of rice exported is higher than the registered capacity.

Agrotrade Director Nguyen Quoc Toan warned that Vietnam will face difficulties in exporting rice in the short term due to obstacles in major markets like China and the Philippines. 

After approving policies to promote rice imports about six months ago, the Philippines has a high inventory of rice at present. The country's farmers asked the Government to support them in rice consumption because they face difficulties in sales. Therefore, Vietnam’s rice exports to this market are expected to fall in the near future.

Meanwhile, the country’s rice exports to the EU are expected to grow strongly in the future due to the positive impact from the EU-Vietnam Free Trade Agreement (EVFTA) when it comes into effect.

Under this agreement, Vietnam will have an export quota at 80,000 tonnes of rice per year with a tax rate of zero to the EU in the future, four times higher than the current exports of 20,000 tonnes per year with a tax between 65-211 EUR (71.9-233.3 USD) per tonne, or estimated at 50 percent of export value.