The door wide open for Vietnamese rice into UK market

16/12/2020    33

Incentives brought about by the implementation of the impending UK-Vietnam Free Trade Agreement (UKVFTA) are expected to assist Vietnamese rice exporters in increasing their market share in the UK, according to experts.

Currently, the UK is viewed as a potentially lucrative market for Vietnamese rice. According to the Ministry of Industry and Trade, Vietnam exported 617,000 tonnes of rice last year, a rise of 10% compared to 2018. Despite the rise, Vietnamese rice export volume to the UK market remains modest at just 0.2%, ranking 22nd among the UK's largest rice exporters.

Phan Van Co, marketing director of VRICE Co. Ltd., explained that Vietnamese rice exported to the UK is subject to high tariffs of approximately 17%, making it more challenging to compete with other regional rivals such as India, Pakistan, and Thailand.

In addition, he said rice exporting businesses also have to satisfy various stringent requirements set by the demanding market. Aside from fulfilling the Global GAP, Hazard Analysis, Critical Control Points (HACCAP), and ISO standards to export to the United States and the EU markets, the businesses are required to meet additional criteria, such as ensuring human rights for workers.

With the UKVFTA to be signed and come into force soon, import taxes are poised to be substantial reduced, therefore allowing his company to gain easier entry to the UK customers, stressed Co.

Sharing the view, Pham Thai Binh, general director of Trung An Agricultural High-Tech Joint Stock Company, said the door is wide open for Vietnamese rice exporters as the UK has not imposed import quotas on rice, enabling businesses to expand their market share.

Trung An is optimistic about the growth of this market which is one of the largest rice consumers in Europe, said Binh, adding his company is currently seeking partners to import Vietnam’s long grain white rice ST20.

Trung An has sold ST20 to Germany for US$1,000 per tonne since the EU-Vietnam Free Trade Agreement (EVFTA) came into force in early August.

Binh advised local businesses to strive to meet stringent standards in terms of the environment and human rights set forth by the high-end market. In addition, competent authorities have been urged to synchronise their policies in an effort to facilitate greater rice exports.

The Vietnam Food Association reported Vietnam has shipped 5.74 million tonnes of rice during the past 11 months, raking in US$2.85 billion despite the adverse impact of the COVID-19 pandemic.

The association stated that although the volume of rice exports endured an annual decline of 2.2%, the export value recorded a remarkable increase of 10.4%, even surpassing Thai rice by US$30 per tonne thanks to its high quality.

Due to the advantages from a series of newly-signed FTAs, there appears to be bright prospects for rice exports moving into next year, according to experts.

Source: Customs News