VietNamNet Bridge – The rice exports to the US now only account for 10 percent of Vietnam’s total rice exports. However, the figure is believed to increase sharply once the Trans Pacific Partnership Agreement (TPP) is inked.

A report by the Vietnam Food Association (VFA) showed that the rice exports to America in the first 11 months of the year accounted for 7.02 percent of the total exports. The sharp increase of 37.66 percent in exports over the same period of the last year has been explained by the increased demand from non-Cuba markets, including the US, Haiti, Mexico and Chile.

In the past, Cuba was the major American export market for Vietnamese rice exporters, who provide rice under the contracts signed by the governments.

VFA believes that Vietnamese businesses can develop the American market with their competitive export prices. Especially, it can see the opportunities to boost exports to the US once both the US and Vietnam become the members of TPP.

Besides the US, the other four countries in America, including Canada, Chile, Peru and Mexico are also negotiating for TPP.

Explaining the above said high growth rate, the director of a rice export company said Vietnam’s rice has become well competitive with Thai rice, which once dominated the market.

According to the businessman, Mexico, Brazil and the US need high quality 5 percent broken rice with higher requirements than some Asian and African markets in terms of the quality and packaging.

Duong Ngoc Minh, President of Hung Vuong Seafood Company, a farm produce supplier to the Asian people’s markets and supermarkets in the US, noted that the restaurants in the US now favor white rice from Vietnam instead of Thai rice because Vietnam’s rice is suitable to different ways of cooking.

According to Minh, the retail price the restaurants have to pay for high quality white rice is about $1,000 per ton. Meanwhile, Vietnam’s five percent broken rice has been exported at $420 per ton only.

Not only the US, but Japan is also believed to become a big client for Vietnam once the TPP is signed, despite the warnings that Japan would keep high protection over its agriculture production.

VFA has officially requested the government to “prepare to penetrate the US and Japanese markets once TPP negotiations finish.”

The association has estimated that the rice exports in 2013 would drop to the 3-year deepest low. The export amount decreases by 1.12 million tons in comparison with 2012, while the average export price decreases by 14.53 percent.

The sharp decreases in both the export quantity and export turnover have been attributed to the weak demand from loyal markets in South East Asia in the second half of the year. There is no demand from Indonesia, while the orders from the Philippines and Malaysia have decreased sharply.

However, VFA said Vietnam still can sell out all of its merchandise rice in 2013 because of the rising demand from China. It is estimated that 1.5 million tons has been exported to China so far this year.

In December, it exported 500,000 tons of rice, raising the total export volume in 2013 to 6.6 million tons, far below the targeted 7.5 million tons.

Mai Chi