The Philippines is the biggest traditional customer of Vietnamese rice. However, the increase in Thai rice market share in this market is a warning signal for Vietnamese rice.
According to the report of the Agricultural Export Administration - US Department of Agriculture , the amount of rice imported by the Philippines this year is at 4 million tons, instead of the previous forecast of 4.1 million tons. Because the domestic rice production of the Philippines is expected to meet the slight increase in domestic consumption demand.
The Vietnam Trade Office in the Philippines cited data from the Philippine Department of Agriculture as saying that as of March 7, the country imported a total of more than 793,753 tons of rice. As usual, Vietnamese rice accounted for the majority, with a volume of nearly 431,850 tons, accounting for 54.4% of the Philippines' total imports. Next was Thailand with 210,127 tons, accounting for 26.5%.
Thus, in the first quarter of 2024, the amount of Thai rice exported to the Philippine market increased compared to before. This is a warning signal for Vietnamese rice as Thai goods begin to increase their market share in this market.
In 2023, Vietnam exported 3.1 million tons of rice to the Philippines, worth 1.75 billion USD, down 2% in volume but up 17.6% in value compared to the previous year. Vietnamese rice accounts for over 80% of the market share in the Philippines.
The US Department of Agriculture forecasts that Philippine rice production will reach 12.13 million tons due to the possibility of El Nino in April and May 2024, as well as the government 's rice production support program by increasing the use of fertilizers and good seeds. The Philippine government, through the Department of Agriculture, has provided 30.8 billion pesos in support for rice farmers nationwide. This amount is much higher than the 15.8 billion pesos in support for rice farmers in 2022.
With increased government support, the country’s rice productivity and output are also on the rise. In 2023, the Philippines’ rice production is expected to surpass 20 million tons for the first time, up 1.5% from 2022.
Previously, Mr. Phung Van Thanh - Vietnam Trade Counselor in the Philippines commented that there is still room and opportunity for Vietnamese rice exporting enterprises to continue to exploit and expand the market, increasing export turnover to the Philippines. However, Mr. Thanh also warned that Thailand is looking for ways to increase output and market share of rice exports to the Philippines and compete with Vietnamese rice.
Therefore, rice exporting enterprises need to continue to coordinate with ministries and branches to implement programs to promote, propagate and advertise Vietnamese rice products. In addition, it is necessary to diversify products, not focusing too much on high-quality rice but exploiting medium-quality rice to serve the large number of people with middle and low incomes. According to the provisions of Decree No. 50 signed by President Ferdinand R. Marcos Jr., rice from countries imported into the Philippines is subject to an import tax of 35% - applicable until the end of 2024.
Data from the Vietnam Food Association shows that since the beginning of the year, Vietnam's rice export prices have fluctuated sharply downward. As of March 27, the export prices of 5% broken rice and 25% broken rice from Vietnam decreased to 582 USD/ton and 558 USD/ton, respectively. Meanwhile, the prices of the same type of rice from Thailand were 599 USD/ton and 551 USD/ton, respectively.
Although rice export prices have dropped sharply, preliminary statistics from the General Department of Customs show that Vietnam's rice export turnover has exceeded the 1 billion USD mark as of March 15. The rice industry aims to export about 8 million tons this year, with an estimated turnover of 5 billion USD.
According to Tam An/Vietnamnet
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