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Vietnam to Boost Rice Export to China

China is expected to reduce its barriers to rice importation to increase its food supply sources. This is a great opportunity for Vietnam to boost rice exports in the context of the difficult market. 

Huge opportunities from big market
According to the China National Grain and Oils Information Centre (CNGOIC), China’s rice output is forecast to fall 0.7 percent year on year this year to 202.8 million tonnes. Besides, the rise in domestic rice prices has caused China to increase rice import from now until the Lunar New Year 2014.
 
Since the beginning of this year, China has emerged as a major importer of Vietnamese rice. According to an incomplete report from the Vietnam Food Association (VFA), the volume of unofficial rice exports to China approximated 1.2 million tonnes since early this year.
 
Meanwhile, the official volume was estimated at 1.62 million tonnes worth US$671.61 million in the first eight months of 2013, accounting for 31.4 percent of Vietnam’s total rice export. Vietnam’s rice shipments to China rose 5.2 times in volume and 4.4 times in value.
 
The International Grains Council (IGC) revised up China's rice imports this year by 16 percent to 2.2 million tonnes and China would likely surpass Nigeria to become the largest rice importer in the world this year. If so, this is a great opportunity for Vietnam’s rice in this big market.
 
Competition will be fierce
However, boosting rice exports to China is not easy. Mr Truong Thanh Phong, VFA Chairman, said Thailand is the biggest rival of Vietnam’s rice in the world in general and in China in particular. Together with rice import easing, China has agreed to increase rice import from Thailand to one million tonnes a year in the next five years.
Recently, Thailand has reduced the price of high-grade rice to boost exports. Vietnamese rice exporters will face a lot of difficulties in competition with Thai rice. Furthermore, some countries will start harvesting their food crop in the near term.
 
According to experts, amid global abundant supply, China’s increased import is a concentrated target for many rice exporters. In this competition, Vietnamese rice exporters must know to take advantage of neighbourhood to promote exports. In fact, Vietnamese rice is facing stiff competition by emerging rivals such as Myanmar and Cambodia.
 
VFA said Vietnamese rice price is lower than Chinese one, thus making Vietnamese food crop more attractive to Chinese consumers.
 
Mr Pham Tat Thang, a senior economic specialist, said that Vietnam needs to have high-quality rice with cheap price to boost exports. The country also needs to change rice production and export strategies towards sustainability. Especially, rice must be cultivated toward global safety standards.
 
In 2012, Vietnam’s rice export to China extraordinarily surged to 2.2 million tonnes, 10 times more than in 2011, let alone more than 500 tonnes unofficially exported.
According to VFA, rice export is expected to be promoted from now to early 2014 on higher demand from key markets such as Africa, China and the Philippines.