There is a large potential for exporting Vietnamese rice to the Philippines in 2024. How to take advantage of it?

What can be done to make farmers and rice exporting enterprises both profitable? Rice export prices are high, but why are enterprises hesitant to sign new contracts?

Filipinos eat Vietnamese rice but don't know the brand.

According to Mr. Phung Van Thanh - Vietnam's Trade Counselor in the Philippines, rice is an essential commodity in the Philippines. The country imports 3.5-4 million tons/year and the same will happen in 2024. This shows that the Philippine market still has a large potential for Vietnam to continue exploiting.

In fact, according to statistics from the Ministry of Agriculture and Rural Development , the Philippines is the number 1 market for Vietnamese rice exports, accounting for about 35% of the market share. In the 11 months of 2023, Vietnam exported 2.63 million tons of rice to the Philippines, equivalent to 1.41 billion USD.

The reason why Vietnamese rice is exported strongly to the Philippines is because Vietnamese rice has the advantage of quality suitable for the people of this country, from the poor to the high-income people and competitive prices. However, Mr. Thanh also pointed out that this was the case in previous years, but now the price of Vietnamese rice is high, so the issue of competition needs to be looked at again. Along with that, we also need to build a brand for Vietnamese rice in this country.

Rice exports achieve many high results in 2023

Specifically, Mr. Thanh said that the Philippines realized its great dependence on Vietnamese rice and is diversifying its supply sources. In addition, according to Mr. Thanh, he recently brought a delegation from the Vietnam Food Association (VFA) to survey the Philippines but unfortunately could not find Vietnamese rice on the market. Meanwhile, Japanese rice and Thai rice are very good at branding.

“Many Filipinos eat Vietnamese rice without knowing it, and we are very concerned about this,” said Mr. Thanh, adding that to make good use of the potential of the Philippine market, the big task is to build a brand so that the people of this country know that they are eating rice grown by Vietnamese farmers.

Why don't businesses do branding?

Regarding the story of building a rice brand, Mr. Nguyen Viet Anh - General Director of Phuong Dong Food Company Limited - shared that currently, rice is mostly sold through bidding, which means choosing low-cost suppliers. Meanwhile, businesses building a brand can only sell a small quantity, so it is very difficult to balance costs.

Meanwhile, the rice export market is very competitive. Businesses that make a mistake will go bankrupt. “ Last year, many factories lost hundreds of billions, and many businesses went bankrupt. Businesses have to quantify each contract, and have to sell first and deliver later, ” said Mr. Viet Anh.

In addition, to build a brand, we must build a raw material area. However, in reality, only a few companies selling chemicals and fertilizers can do it, while companies that only produce rice find it difficult to build a linked area because they cannot balance costs.

Faced with the difficulties of businesses, Mr. Phung Van Thanh said that in 2024-2025, the Trade Office and the Vietnamese Embassy in the Philippines will establish a Vietnam - Philippines Business Club. This is to help Vietnamese businesses have the opportunity to approach reputable partners without having to go directly to the Philippines. Thereby reducing costs and avoiding encountering fraudulent partners. "This is one of the programs we implement to support rice exporting businesses," Mr. Thanh emphasized.

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