EVFTA opens “big door” for Vietnamese rice to enter EU market

Workers of Loc Troi Group JSC are harvesting rice in Dinh Thanh commune in Thoai Son district, the Mekong Delta province of An Giang (Photo: VNA)

Hanoi (VNA) - With the European Union – Vietnam Free Trade Agreement (EVFTA), the EU will completely liberalise trade in broken rice, and will reduce the tax rate to zero percent for Vietnamese rice products after three to five years. This is a great opportunity for Vietnamese rice to compete in the EU market.

According to the Ministry of Agriculture and Rural Development (MARD), every year, the EU spends 1.4 billion EUR on importing 2.3 million tonnes of rice. When the EVFTA takes effect, there is great potential for rice export to the EU.

Rice quotas for Vietnam under the EVFTA are expected to push Vietnam’s rice exports up from the second half of this year.

Under the trade deal, which became effective on August 1, the EU pledges to provide an annual rice quota of 80,000 tonnes (30,000 tonnes of milled rice, 20,000 tonnes of unmilled rice and 30,000 tonnes of fragrant rice) for Vietnam and completely liberalise trade in broken rice, allowing Vietnam to export an estimated 100,000 tonnes to the EU annually.

After three to five years, tariffs on rice products will be slashed to zero percent, offering a great chance for Vietnamese rice to compete in the market in terms of price and quality.

However, MARD Minister Nguyen Xuan Cuong said to make full use of this advantage, the agricultural sector must be restructured toward setting up commodity production chains, which closely link cooperatives and enterprises with farmers to form a complete process from supplying raw materials to processing, towards ensuring traceability, food safety and regulations related packaging and label.

According to Professor, Dr. Vo Tong Xuan, Vietnam should designate high-quality rice growing areas with large scale and meeting standards set by demanding markets such as the EU and the US, thus promoting sustainable development of the rice industry.

The MARD said it always supports enterprises and localities to build production chains to create quality and safe products.

In the first eight months of 2020, Vietnam exported over 15,800 tonnes of rice worth about 8.5 million USD to the EU market. Meanwhile, from September 4 – 17, six enterprises applied for export certifications of 4,300 tonnes of fragrant rice.

According to the MARD, the export of rice products, including fragrant rice to the EU, in the remaining months of this year, is expected to continuously increase despite negative impacts of the COVID-19 pandemic.

Chairwoman of the Food Agri & Aqua Business Sector Committee under the European Chamber of Commerce in Vietnam Marion Matinez speaks at a launch ceremony in An Giang for the export of fragrant rice consignment to Europe. (Photo: VNA)

Most recently, on September 22 in An Giang, Loc Troi Group JSC officially held a launch ceremony of its export batch of fragrant rice to the EU under the EVFTA.

The 126-tonnes batch of fragrant rice exported to the EU at the end of September will start the campaign to ship 30,000 tonnes of Vietnamese fragrant rice to the EU at zero tariffs in line with the EVFTA.

To make inroads into the EU market, Loc Troi Group JSC spent many years building standard raw material growing areas.

According to Huynh Van Thon, Chairman of the Board of Directors of Loc Troi Group JSC, his firm has applied new technologies in production and processing to improve the quality of rice.

It has so far invested in five rice mills in rice cultivation centres, which meet the national quality standards and rigorous production standards of the EU market, Thon said./.

Representatives from the MARD visit a rice production factory of Loc Troi Group JSC in An Giang province (Photo: VNA)