The country’s rice exports could plummet by 27 percent this year.
The Vietnam Food Association has revised down its full-year forecast for rice exports twice this year, attributing the downturn to a lack of demand from key markets and Thailand’s sales of its massive stockpiles.
Export volume, including sales across the border to top buyer China, is projected to fall by more than 2 million tons from last year’s 6.56 million tons, the Saigon Times cited industry experts as saying.
Meanwhile, India and Thailand, which are Vietnam’s main competitors in the global market, have performed well so far this year. Vietnam is the world’s third-largest rice exporter after India and Thailand.
India, which overtook Thailand as the world’s largest rice exporter in 2015, shipped about 8.1 million tons in the first 10 months of the year, down 9.9 from the same period last year. Thailand exported 6.9 million ton of rice, up 3.7 percent on-year.
According to industry experts, after Thailand announced plans to clear its state stockpiles, estimated at around 9 million tons in August, Vietnamese rice has become less competitive in major markets across Asia.
Customs data shows that from January–October, Vietnam’s rice exports to the Philippines, Indonesia and Malaysia, which account for 40 percent of its total annual volume, slumped 42.2 percent to 940,000 tons.
Another key factor is that Vietnam has long been focused on quantity rather than quality, which has actually backfired on the country’s rice exports.
Vietnamese rice exporters are also faced with the risk of being banned from the United State after a series of pesticide residue scandals.
Between January 2012 and August 2016, 412 containers or 10,000 tons of rice shipped from Vietnam to the U.S. were returned due to hygiene and safety issues, statistics from the U.S. Food and Drug Administration (FDA) show.
The FDA said it found eight active chemicals in the Vietnamese rice shipments above the permissible limits set by the U.S. Department of Agriculture.