Will technical barriers imposed by the Philippines create difficulties for Vietnams rice

It will be difficult for Vietnamese businesses to keep stable rice exports to the Philippines in large quantities as currently seen, experts said.

The Ministry of Industry and Trade (MOIT) said the Philippines plans to tighten control over rice imports to ensure food hygiene.

Will technical barriers imposed by the Philippines create difficulties for Vietnam’s rice exports?

The country is the biggest rice importer in the world and the No 1 export market for Vietnam. In 2019, the country imported 2.9 million tons of rice, including 2.132 million tons from Vietnam, worth $885 million, or 73.4 percent of total amount of rice imported by the country.

In 2020, the country plans to import 2.5 million tons.

Vietnam exported 87.828 tons to the Philippines in June, worth $42.768 million tons, a decrease of 44.62 per cent in quantity and 34.9 percent in export turnover.

The figures were 1.376 million tons and $634.26 million in H1, which represented increases of 12.89 percent in quantity and 30.06 percent in export turnover.

The Philippines initially planned to send it staff to Vietnam to examine rice production earlier this year, but it later postponed the plan because of Covid-19. The examination is expected to be carried out after the epidemic is contained.

Tran Tuan Kiet, deputy general director of Dung Nam Trade and Import-Export Services, warned that the technical barriers by the Filipino government would be a big obstacle for Vietnam, though Filipino consumers favor Vietnam’s rice.

Kiet said the technical requirements set by the Philippines are nearly the same as the requirements set by China, and it would be difficult for Vietnam’s enterprises to continue exporting rice to the Philippines in large quantities.

“The tentative requirements can be met only by large corporations, and it would be a big obstacle for small and medium enterprises,” Kiet said.

The Philippines initially planned to send it staff to Vietnam to examine rice production earlier this year, but it later postponed the plan because of Covid-19. The examination is expected to be carried out after the epidemic is contained.

It is highly possible that the Philippines will follow China and grant export licenses only to enterprises which have processing plants meeting their food hygiene requirements.

A rice market analyst said the Philippines’ decision to set barriers on rice imports will cause difficulties for Vietnam’s rice exporters.

Malaysia and Indonesia do not set food hygiene requirements on rice imports.

There’s a possibility that the Filipino government has set barriers to restrict import volume and protect domestic production. However, domestic production cannot satisfy domestic needs, and the rice from Filipino farmers is much more expensive than rice imports from Vietnam.

The decision would affect people’s purse strings. The Philippines currently is very short of rice, and it won’t find other supply sources that can provide delicious rice at such competitive prices like Vietnam’s products, the analyst said.