HANOI: The Vietnam Food Association has asked the country’s trade ministry to challenge a move by the Philippines to suspend rice imports for two months, two sources told Reuters, with traders saying it will harm local production.
The Philippines, Vietnam’s biggest rice buyer, said last week that it would suspend rice imports for 60 days starting from September 1 in an effort to protect local farmers impacted by falling prices during the harvest season.
“The Philippines is Vietnam’s largest rice export market and the suspension would have significant impacts on rice production in Vietnam,“ said one of the sources, a trader with knowledge of the matter.
The association and the Ministry of Industry and Trade didn’t immediately respond to Reuters’ requests for comments.
Vietnam exported 2.44 million metric tons of rice to the Philippines in the first seven months of this year, accounting for 44.3% of its total rice shipments over the period, according to official customs data.
Last year, the Philippine market accounted for 46.7% of Vietnam’s total rice exports, with shipments in September and October higher than monthly average.
Vietnam early this year signed a memorandum of understanding on rice trade with the Philippines, where rice production is often prone to flooding and typhoon risks.
“They are suspending rice imports this year to protect their farmers ahead of an expected bumper harvest,“ said a second trader based in Ho Chi Minh City.
The Philippines’ rice production in the second quarter grew 13.9% from a year earlier, a sharp acceleration from the 0.3% growth in the first quarter.
Traders said the Philippines’ move to suspend rice imports will put pressure on export prices of Vietnamese rice.
Vietnam’s 5% broken rice RI-VNBKN5-P1 was offered at $395 on Tuesday, down by nearly 30% from a year earlier, according to data from the association.
“We fear that prices will fall further if there’s the suspension,“ the second trader said. – Reuters
