Vietnamese rice entering China will face big challenges

If the sharp drop in rice prices in the first months of this year caused concern for Vietnamese traders and farmers, Vietnamese traders now say they may have to lower their prices even further in 2013 to compete with Myanmar and Pakistan rice for a larger market share in China.

According to FAO, China imported 1.43 million tons of rice from Vietnam in the first 10 months of this year, accounting for 22% of Vietnam's total rice exports during that period. In 2013, China is expected to import a total of 2 million tons of rice, but competition among suppliers will be stronger than this year. According to Pakistani rice exporters, the country exported 800,000 tons of rice to China this year and is expected to increase the export volume next year. Meanwhile, Myanmar also aims to increase the amount of rice exported to China from 700,000 tons as at present to 1.5 million tons next year. That is not to mention a large amount of Myanmar rice being brought into China through the border.
In addition, it is forecasted that Vietnam's rice exports in early 2013 may face fierce competition from Thai rice as this country is under pressure to release its rice reserves. Thailand may even sell rice at cheaper prices in the context of a world with plenty of rice. Meanwhile, major rice importing countries such as the Philippines and Indonesia have declared that they will not import in 2013 with the goal of self-sufficiency in rice.

According to the report of the Vietnam Food Association, Vietnam's rice exports in the first days of December 2012 reached 152,483 tons, FOB value of 69.414 million USD. Cumulative exports from the beginning of this year to December 6 reached 7.256 million tons, FOB value of 3.234 billion USD. The volume of exported rice has now exceeded by about 2% the 7.1 million tons of rice exported in the whole year of 2011. It is expected that this year the whole country will export 7.65 to 7.7 million tons of rice.

The price of 5% broken rice from Vietnam is currently selling for 400 - 410 USD/ton, down about 50 USD/ton compared to last month. Meanwhile, the price of 5% broken rice from Myanmar is currently selling for 370 - 380 USD/ton, the price of 5% broken rice from Pakistan is 425 - 435 USD/ton.

According to (NNVN) - LC