Rice exports to the EU is projected to reach 100,000 tons

According to the European Union - Vietnam Free Trade Agreement (EVFTA), the EU grants Vietnam an annual quota of 80,000 tons of rice exports to this market. However, the amount of rice exported by Vietnamese businesses to the EU have exceeded this quota in 2022.

According to the General Department of Customs of Vietnam, Vietnamese rice businesses exported over 94,000 tons of rice to the EU market, which is 14,000 tons higher than the quota and an increase of 48% compared to that of 2021.

It is expected that Vietnam's rice exports to the EU in 2023 will continue to exceed the quota of 80,000 tons. Most notably, Vietnam exported approximately 47,000 tons of rice to the EU market within the first five months of 2023, which is an increase of 6.8% over the same period in 2022. According to some food traders' speculations, Vietnam can export a record-breaking 100,000 tons of rice to the EU in 2023 if it maintains the current export momentum.

Many Vietnamese traders are optimistic that rice exports to the EU can reach the aforementioned milestone due to the anticipated decline in rice production in this market. Reports from the EU show that, the rice production area in Italy, which accounts for 50% of the EU's rice production, will only reach 211,000 hectares in 2023 due to influences from the weather. This is a decrease of 7,400 hectares compared to that of 2022 and a decrease of 16,000 hectares compared to that of 2021. As a result, the rice production area in Italy will be at its lowest level in the last twenty-three years in 2023.

The US Department of Agriculture (USDA) forecasts that the rice yield from the EU's 2022-2023 crop will only reach 1.33 million tons, which is a sharp decrease of 22.9% compared to previous crops and the lowest level since 1990. Consequently, the EU's rice imports are forecast to increase to a record level of 2.65 million tons in 2023.

The quality of Vietnamese rice is constantly improving thanks to the enhanced production of fragrant and high-quality rice. Furthermore, the effective utilization of the EVFTA makes a significant contribution to promoting Vietnam's rice exports to the EU.

Fragrant rice accounted for the largest proportion in the structure of rice varieties exported to the EU in the first five months of 2023, at 39%. Fragrant rice is closely followed by white rice at 26.8% and Japonica rice at 18.2%. The remaining rice varities include brown rice, micronutrient rice and sticky rice. Thanks to the sizeable market share of Vietnamese fragrant rice and Japonica rice in the EU, the price of Vietnam's rice exports to the EU reached an average of 667 USD per ton within the first five months of 2023. This price point is considerably higher compared to Vietnam's overal average export price of 529 USD per ton.

According ot Mr. Pham Thai Binh, General Director of Trung An High-Tech Agriculture Joint Stock Company, despite the small amount of rice exported to the European market, the average price is significantly higher than that of rice exported to Asian and African markets. As a result, effective utilization of the EVFTA to boost rice exports to the EU will contribute significantly to increasing the value of Vietnam's rice exports.

In addition to major markets in Asia and Africa, Vietnamese rice exporters have begun diverting their attention to other markets around the world in recent years, including the EU.

Mr. Nguyen Tuan Thanh, Director of Long An province's Department of Industry and Trade, reported that the majority of rice exporters in the province have diversified their markets. Additionally, they are gradually shifting from common rice varieties such as IR504 or OM 5451 to high-grade rice varieties such as ST, Nang Hoa, Dai Thom 8, Jasmine, and so on. Consequently, these high quality rice products can access larger and more demanding international markets.

Rice exporters in Long An province have expanded their targets, from familiar markets such as China, Singapore, Indonesia, Ghana, Malaysia, Philippines, Africa to fastidious markets such as Germany, the UK, Netherlands, France, USA, Canada, etc. Current exported rice varieties include fragrant rice, white rice, glutinous rice, Japonica rice among many others.