Despite increasing purchases of many Vietnamese agricultural products, China has sharply reduced imports of rice and pepper from Vietnam in the first months of this year. So, why has China reduced imports of these products from our country?

China has been the main export market for Vietnamese agricultural products for many years. In the first 7 months of 2024, exports of agricultural products to China reached 7.04 billion USD, up 11.3% over the same period last year.

Accordingly, China continues to be the second largest market (after the US), accounting for 20.5% of the total export turnover of the agricultural sector in the past 7 months.

Many export items to China continued to increase sharply. For example, fruit and vegetable exports to this market reached 2.5 billion USD, up 25% over the same period. Items such as seafood, cashew nuts, wood, coffee, etc. also recorded good growth rates in the first 7 months of 2024.

However, rice and pepper exports to China plummeted. Specifically, by the end of July 2024, pepper exports to this billion-people market only reached 8,000 tons, a sharp decrease of nearly 85% compared to the same period last year.

Similarly, rice exports in the first 7 months of 2023 reached 413.5 million USD, but in the same period this year it was only 130.8 million USD. That means rice exports in the first 7 months of this year decreased sharply by 68.4% compared to the same period last year.

According to statistics, in 2012, China was the largest customer of Vietnamese rice exports, with a turnover of 898 million USD, accounting for 27.5% of the total rice export value.

The value of Vietnamese rice exports to China in the period 2012-2016 remained relatively stable. In 2017, rice exports to this market increased dramatically, reaching nearly 1.03 billion USD, accounting for nearly 40% of the total rice export value of our country.

But soon after, the export of Vietnam's "pearl" product to the Chinese market suddenly plummeted, reaching only about 640 million USD in 2018. By 2019, the export turnover dropped to 240.3 million USD. Vietnamese rice almost lost its market share in the billion-people market. With this figure, China fell from being Vietnam's No. 1 rice export market to No. 3.

The following year, China was in the top 5 rice export markets of Vietnam. However, this year, rice exports to this market decreased sharply.

This is contrary to the forecast that China will increase rice imports sharply in 2024. Because, in 2023, China's rice growing area continuously decreased below 30 million hectares, rice output also decreased consecutively for two years, while consumer demand is forecast to maintain a slight increase (about 150 million tons of rice).

So why has China sharply reduced its imports of rice and pepper from Vietnam?

According to the Vietnam Pepper and Spice Association (VPSA), China used to be the second largest export market for this “black gold” pepper from Vietnam, but has now dropped to fifth place, after the US, Germany, India and the UAE.

Some exporters of this item say that China’s domestic pepper prices are lower than imported goods. In addition, the world’s second largest economy grew more slowly than expected in the first half of this year, so people’s spending demand decreased and inventories remained sufficient. These are the reasons why this country has sharply reduced its imports of pepper from Vietnam.

VPSA forecasts that the demand for importing this agricultural product from the Chinese market will be difficult to improve in the second half of the year.

Rice exports to China have decreased sharply. Illustration photo: Hoang Ha

As for rice, experts say that one of the reasons China has reduced imports is because it limits the number of Vietnamese rice enterprises allowed to export to this market. Currently, only 21 out of about 200 domestic rice enterprises are licensed.

In addition, Vietnamese rice also has to compete fiercely in the Chinese market. Rice products here are of relatively high quality, in addition to the fact that exporting countries pay great attention to packaging, especially Thai rice.

Speaking to PV. VietNamNet, Mr. Pham Thai Binh - Chairman of the Board of Directors of Trung An High-Tech Agriculture Joint Stock Company - said that the decrease or increase in purchases is due to market supply and demand. For Trung An, rice export orders to China are not as many as other markets.

According to Mr. Binh, in recent years, China has raised its standards for the quality of goods, including rice. In the high-end rice segment, fragrant rice, sticky rice or ST24... require strict quality and packaging design.

Meanwhile, the average segment of Chinese importers prefers cheap goods and broken rice for processing. They import large quantities but prioritize low prices, so Vietnamese businesses find it difficult to compete with rivals in other countries.

In fact, in the last months of 2023, in the 5% broken rice and 25% broken rice segments of Vietnam, the average export price is always higher than the same type of goods from Thailand and Pakistan. Vietnamese businesses have the habit of signing long-term contracts, so high prices will affect order negotiations with Chinese partners.

In this situation, the authorities recommend that businesses need to closely monitor developments in the Chinese rice market, update market information, promptly grasp the latest movements of the importing country's market, respond promptly as well as seize opportunities.

Currently, fragrant rice, high-quality rice, ST24 and ST25 rice are popular in the Chinese market, so businesses need to maintain, promote and expand market share, while taking advantage of building brands for Vietnamese rice products in this most potential market.

Source: Nguoi Quan Sat