HCM City (VNA) – Exports of glutinous rice toChina, Vietnam’s biggest rice importer, are stagnating, despite overseasshipments of the commodity soaring 34 percent in the first half of 2017.

Statistics from the Vietnam Food Associationshow that 2.65 million tonnes of rice were shipped abroad with free-on-boardvalue of 1.65 billion USD in the first six months of 2017, an increase 0.25percent in volume and 1.85 percent in value from the same period last year.

More than 1.16 million tonnes or 43.8 percent ofthe volume was shipped to China between January and June. 

Meanwhile, more than 660,000 tonnes of the totalexported rice was glutinous rice, surging 34 percent from a year earlier. 

Overseas shipments of glutinous rice have soldwell for the last three years as China began to purchase more of this product.Glutinous rice has made up 25 percent of exported rice volume, compared to16.65 percent and 6.65 percent in the respective first halves of 2016 and 2015.

Most of Vietnam’s glutinous rice was destined forChina, with a little for Indonesia.

The demand for glutinous rice in China has beenrelatively high in recent years, boosting both domestic and export prices.Businesses even exported glutinous rice at 490-500 USD per tonne at the end ofthis year’s winter-spring crop.

However, glutinous rice exports to China haveslowed down over the last week, causing a drop in export prices, from 460-470USD per tonne a week ago to 420-430 USD per tonne at present. Domestic pricesalso fell from 10,800-11,200 VND per kg to 10,400 VND per kg, said Dang ThiLien – Director of the Long An Foodstuff Co. Ltd.

[Infographics: Vietnam’s rice export mark🐲ets development strategy]

Many companies blamed the slowdown on changes inChina’s glutinous rice import policy, forcing Chinese importers to offer lower bidsto Vietnamese sellers to make up for higher import expenses.

Vietnamese firms will struggle to make a profitif they sell glutinous rice at 420-430 USD per tonne to China while purchasingit at 9,000-10,000 VND per kg from local farmers, explaining why the exportshave slowed down.

Some enterprises said although China is a goodmarket where Vietnam’s glutinous rice has few rivals, once supply surpassesdemand, Vietnam’s dependence on the market poses great risks.

Experts said the agriculture ministry’sDepartment of Crop Production and localities should control the structure ofplanted rice varieties and avoid expanding the glutinous rice area.

Rice exporters also need to expand markets,especially in the Middle East and Southeast Asia, to avoid excessive dependenceon China.-VNA