Shrinking agricultural land and sharply growing population make it difficult for the Philippines to produce enough rice to meet domestic demand. Therefore, Philippines usually imports more than one million tons of rice annually and that Philippines import rice from Vietnam has become a regular task of this country.
- 1 An overview of Philippines import rice from Vietnam
- 2 Reasons why Philippines import rice from Vietnam
- 3 Main factors affecting the price: Philippines import rice from Vietnam
- 4 Procedures for Philippines import rice from Vietnam
- 5 Philippines import rice from Vietnam: Ways to work with Vietnamese rice suppliers
- 6 Philippines import rice from Vietnam: Top 5 Vietnamese rice suppliers
An overview of Philippines import rice from Vietnam
Vietnam’s rice exports to the Philippines accounted for 87% of the country’s rice imports in the first half of this year.
General figures about Philippines import rice from Vietnam
By 2021, the Philippines ranks first in Vietnam’s rice import market with 32.9% market share, reaching 1.86 million tons and 868.66 million USD in the first 11 months of 2020, down 4.3% in volume but increased by 8.4% in value over the same period last year.
The Philippines imported nearly 412,000 tons of rice from Vietnam, worth $220 million in the first three months of 2021. Specifically, in the first three months of the year, the Philippines was Vietnam’s largest rice consumption market with 36.3% market share, volume and value reached 411,580 tons respectively, down 30.7% in volume over the same period in 2020.
Philippines import rice from Vietnam for some basic reasons. Vietnam is a country in Southeast Asia with the Philippines, this will help reduce transportation costs instead of importing from a more remote country like India. Moreover, Vietnam is the second largest rice exporter in the world, so Vietnam can ensure the supply as well as reasonable prices for the Philippines. Vietnam offers a wide range of premium to medium quality rice that is suitable for Filipino palates such as jasmine, OM 5451 rice, who are used to the taste of these kinds of rice.
Leading products that Philippines import rice from Vietnam
In the first three months of 2021, the volume of Philippines import rice from Vietnam was 411,580 tons, worth $220 million. The country imports a lot of white rice, jasmine rice and fragrant rice.
- White rice
The Philippines imported an enormous amount of white rice each year, more than 100,000 MT in 2020, accounting for 53.7% of the white rice from Vietnam turnover because of its simple, starchy flavor, it pairs well with a lot of salty and sour local dishes. White rice is also known as pureed or fully polished rice since the husk, bran, and germ of the grain are removed during the preparation process. the Export price of Vietnamese white rice to the Philippines varies 434-452 USD/MT.
- Jasmine rice and fragrant rice
Jasmine rice and fragrant rice are the main rice export of Vietnam to the Philippines, with a volume of over 20,000 tons in 2020, accounting for 11.3% of the Vietnamese jasmine rice turnover. Vietnamese jasmine and fragrant rice grains are naturally white and round (the average length is 6.8mm). Their scent is distinctive and jasmine rice has a sweet flavor, light scent, softness, and medium flexibility when cooked. Even when cooled, jasmine rice retains its flexibility. Those characteristics make Filipino consumers prefer jasmine rice from Vietnam. Export prices for jasmine and fragrant rice to the Philippines range from 563-567 USD/MT.
- Glutinous rice
The Philippines is fond of glutinous rice when importing 53,521 MT in 2020. Glutinous rice has a shorter grain size and a waxy milky white color. Glutinous rice has strong adhesion but a low bloom when cooked. When the grains are ripe, they are more clingy than spongy, and they remain longer when eaten. Philippines import rice from Vietnam with the price of 465-475 USD/MT.
Reasons why Philippines import rice from Vietnam
Vietnam is a country in Southeast Asia with the Philippines and offers a wide range of premium to medium quality rice that is suitable for Filipino palates such as jasmine, OM 5451 rice every year, so the Philippines import rice from Vietnam due to the following reasons.
The delivery capacity of Vietnamese companies is high with various modes of transport such as FCL, LCL, and air shipment, the transportation route is close (the Philippines is about 1,500 Km from Vietnam), so the freight is cheap and the delivery time is short (from 5-14 days) compared to Thailand and India (10-20 days). Besides, Vietnam also has a geographical advantage, rice goes from Ho Chi Minh City port to the Philippines port very quickly, Thailand and India cannot catch up with. The cost of shipping rice from Thailand to the Philippines is about 31-32 USD/ton while this cost from Vietnam to the Philippines is about 25 USD/ton.
Productivity advantage and stable output
Vietnam, currently accounts for about 20% of the total amount of rice exported in the world and continuously from 2000-2015, is in the top 3 countries in terms of export rice output. In 2000, Vietnam’s rice export output was 3.5 million tons, in 2005 it was 5.25 million tons and in 2015, it exported 6.59 million tons, reaching an export value of 2.8 billion USD, average export price is 425.7 USD/ton. In 2020, the export output is 6.15 million tons, worth 3.07 billion USD.
The process of rice for export at K-Agriculture company
The advantage of rice varieties is suitable for the living habits of the Filipino people
Rice (especially white rice), is considered the staple in Filipino food. It is present in every home and is part of the Filipino meal – breakfast, lunch and dinner. Because of its simple, starchy flavor, it pairs well with a lot of savory and sour local dishes. Vietnam provides the Philippines with soft, fragrant rice like jasmine rice, OM rice, so it is very suitable for the taste of the Philippines, while India exports basmati rice, the basmati rice grains are still separate, and dry after being cooked, Filipinos do not like it much.
Advantage of tax incentives
From May 30, 2021, the rice import tax rate of the Philippines is reduced to 35%. This policy is valid for one year. Since the Philippine Rice Taxation Law took effect until now, Vietnamese rice when exported to this country both inside and outside the quota is enjoying a tax rate of 35%, lower than the tax rate applied to other traditional rice exporting countries such as India, Pakistan. However, the “equalizing” rice import tax rate for all countries at 35% makes it more difficult for Vietnam to export rice.
Main factors affecting the price: Philippines import rice from Vietnam
Some significant factors have an influence on the amount of rice imported from another nation, which can affect volume increase or decrease in a negative or positive way.
Rice production in Vietnam
In the period 1986-2018, Vietnam’s rice area and production continuously increased, from 5.7 million hectares and 16.0 million tons in 1986 to 7.6 million hectares and 44.0 million tons in 2018 thanks to many innovations in politics and economics. In 2018, the rice production area of the country was more than 1.3 times higher, the rice yield was more than 2 times and rice output was 2.7 times higher than 1986. After more than 30 years, rice production increased by nearly 28 million tons. These figures show that rice production in Vietnam is stable, however, currently, the summer-autumn crop has been fully harvested while the government is increasing national reserves, thereby pushing up domestic and export prices. Therefore, the export price of vietnamese rice to the Philippines slightly increased to 438-442 USD/ton.
Rice demand in the Philippines
Rice imports to the Philippines in 2020 reached 2.3 million tons, compared with a high record of 2.9 million tons in 2019 when the country lifted two-decade restrictions on rice imports. The Philippine Department of Agriculture is expected to import at least 1.7 million tons of rice in 2021 to meet domestic demand. However, the Philippines will have a shift in importing rice from Thailand and Vietnam to buying rice from other countries with much lower value such as India. Rice price of India, the world’s largest rice exporter, in December the price was stable at 383-388 USD/ton (5% broken) for the second consecutive week, about 100 USD/ton lower than Vietnamese rice. This affects badly Philippines import rice from Vietnam when demand for Vietnamese rice is reduced but the price of Vietnam cannot decrease.
Transportation is battling port congestion as a result of the Covid-19 epidemic. That Philippines import rice from Vietnam may be delayed in delivery or cargo preparation. The transportation charge has recently risen drastically, from 500 to 1,000 USD every time, and has even risen to 2,000-3,000 USD per time, making many suppliers have to quote customers at a high cost.
Procedures for Philippines import rice from Vietnam
The conditions and procedures for the rice export business changed quite a lot, so importers and exporters should be aware of it.
Procedures for Vietnam to export rice
The first is a certificate of eligibility for rice export business issued by the Ministry of Industry and Trade. To get this certificate, businesses must meet the rice exporting conditions for warehouses, mills, etc.
The second step is to sign up for a rice export contract
Documents for registration of rice export contract includes:
- A written request for registration of a rice export contract
- The original or a valid copy of the signed rice export contract.
- The original report on the amount of paddy and rice available, clearly states the total amount of paddy and rice the trader has available in stock; specific address and quantity of rice in each trader’s rice and paddy warehouse.
- A valid copy of the valid certificate of eligibility for rice export business (hereinafter referred to as the Certificate for short), upon initial contract registration.
Thus, once the above two things have been obtained, the next thing is to synthesize the documents and do customs procedures.
Procedures for Philippines import rice from Vietnam
Philippines import rice from Vietnam should have the following documents:
- Initial Letter of Intent (Prescribed Format)
- 52017 Audited Financial Statement received stamped by BIR
- Application Form
- Affidavit of Undertaking
- Suppliers Pro-forma Invoice
All of these papers were mandated by DTI and indicated in the NFA General Guidelines (Department of Trade and Industry Philippines).
Rice importers need to carry out phytosanitary procedures and inspect food safety when importing.
Enterprises have an account to register to declare when the goods arrive.
The customs documents for importing rice normally includes:
- Commercial Invoice
- Packing List
- Bill of Lading
- Certificate of Origin (to enjoy preferential tariff)
- Other documents (if any)
Philippines import rice from Vietnam: Ways to work with Vietnamese rice suppliers
Filipino importers should have some basic knowledge before importing rice from Vietnam – one of the largest rice exporting countries. There are three main steps to have a successful rice order.
- Learn about Vietnam’s laws and regulations.
This step is crucial because it lowers the possibility of breaking the law while working together. Understanding the legislation and rules, Philippines import rice from Vietnam is smooth by a good preparation of procedures and documents.
- Understand the supplier’s order procedure and payment methods.
When buyers interact with any supplier, it is critical to understand the partner’s order procedure and payment terms. This saves time, prevents problems with cargo delivery and avoids scamming.
- Provide product and service reviews and comments.
Customers should provide comments after receiving shipments to help distributors of Vietnamese rice improve the quality of products and services. Furthermore, customers are more inclined to satisfy the increased demands.
Philippines import rice from Vietnam: Top 5 Vietnamese rice suppliers
Here are some reputable wholesale rice exporters in Vietnam for buyers’ references.
Angimex Import Export Company
Established in 1976, Angimex is one of the leading enterprises in Vietnam with the main product line being rice. Angimex has a system of food processing plants spread throughout key raw material areas, with convenient transportation, and warehouses with a capacity of up to 100,000 tons; Currently Angimex from 230,000 – 300,000 tons of rice/year with many types of rice to many big markets such as: Singapore, Malaysia, Philippines. Angimex can produce the highest 2,200 tons of rice/day, so it is also one of the largest rice export companies in Vietnam, contributing a big amount in volume of Philippines import rice from Vietnam.
Trung An Company
Trung An with available advantages from premises, warehouses, and constantly invests in developing more modern infrastructure, machinery and equipment, expanding raw material areas, strictly controlling and managing from planting stage. from cultivation to processing and packaging according to ISO, HACCP, GAP standards in order to provide the market with the safest and best quality rice products.
K-Agriculture Factory – a supplier of Philippines import rice from Vietnam
K-Agriculture Factory is a pioneer among many Vietnamese rice suppliers, with the potential for fast growth. K-Agriculture Factory exports rice, coffee, spices, and other agricultural products to over 80 countries worldwide. Importers of Philippines import rice from Vietnam could trust this exporter because of the fair pricing, well-designed packaging, and reliable cargo handling. Its milling capacity is 2500 MT per day, and its storage capacity is 400000 MT. In addition, K-Agriculture Factory has HACCP and ISO certifications.
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Ngoc Dong Food Company
Ngoc Dong Food Co., Ltd. is one of the quality rice exporters in Vietnam because its rice has been exported to more than 10 countries around the world with equipment for the rice production process provided by leading manufacturers of processing machinery and equipment, improving the productivity and quality of each rice to ensure the highest standards to satisfy the rice importing countries.
Ngoc Dong is the leading rice exporter for Philippines import rice from Vietnam by rice production output of 100,000 tons/year., long experience in rice production, output capacity: 1,000 tons/day (non-colored white rice) and 500 tons/day (high-quality decolorized rice, capacity: 60,000 tons.
Sunrise Foodstuff., JSC – a supplier of Philippines import rice from Vietnam
Sunrise Foodstuff., JSC is a leading rice producer and exporter in Vietnam with more than 10 years of experience having a trade network covering different regions around the world like Africa, EU, USA, etc. Sunrise company owns 2 milling plants that are always operating with high capacity that can produce a wide variety of rice products and facilities with can meet the needs of partners and customers in both quality and quantity.
The Philippines will continue to be the world’s largest rice importer in the coming years, so Vietnam should take advantage of the opportunity to increase exports to this country.