Exporting rice to Africa : Potentials and risks

Market Information
icon date22/07/2023

What is the current status of rice exports to Africa, what are the potentials and risks when exporting to this market? Let’s find out through the article below.

The situation of rice exports to Africa 2022

Vietnam Trade Counselor Hoang Duc Nhuan cum market Niger, Senegal and Gambia, Mali, said that the situation of Vietnam’s rice exports to Africa increased in the first 6 months of 2022, expected to continue to increase in the coming months and even 2023.

According to the survey results of a resident reporter in Algiers, Africa is currently a region with a high demand for rice, especially in the West because rice production is not enough at times of natural disasters, epidemics or political instability.

On average, each year, Africa has to import rice from many countries, including Vietnam, from 12-13 million tons of rice of all kinds.

In terms of the rice market in Africa in the 10 months of 2022, Vietnamese rice exporting reached 2.739 million tons, accounting for 45.02%, worth $1.266 billion, an increase of 30.84% in volume and 18.39% in turnover compared to the same period in 2021.

As of the end of November 2022, according to the latest data of the Plant Industry Department, total rice exports in Africa reached 3.234 million tons, nearly one million tons higher than in the same period last 11 months.

Currently, the rice turnover accounts for 20% of Vietnam’s total exports to Africa. The big issue in food security that African countries are concerned about is the quality and cost of products.

Potential for rice export to Africa

Thanks to modern machinery and technology, rice is thoroughly tested, so Vietnam has been licensed to export rice to many major countries in the international market, including Africa.

The quality of Vietnamese rice is increasing day by day

Vietnam is one of the largest rice producing countries in the world. Many people also know Vietnam with the name “big rice bowl”, because the annual rice production area reaches over 7.24 million hectares, with high productivity (60.6 quintals/ha). Vietnam’s rice output in 2022 will reach over 43.8 million tons (an increase of 1.1 million tons compared to 2021).

During the Seminar to improve the efficiency of rice trade cooperation, African partners said that the quality of Vietnamese rice is highly appreciated in the international market. Deputy Director of the Import-Export Department – Ministry of Industry and Trade said: “Vietnam’s biggest advantage is owning fertile land, agriculture constantly improves machinery and applies technology to improve rice quality. to export”. Therefore, varieties of fragrant rice, jasmine rice, high-grade white rice (5% broken), japonica rice, sticky rice, nutritious rice… are being exported a lot by Vietnam to major countries. The quality of Vietnamese rice is also confirmed through the ST25 – with the mission of being the best rice type in the world loved by many consumers.

Up to now, Vietnamese rice has been sold in over 150 countries and territories, successfully exported to fastidious markets that require high quality standards such as: the European Union (EU), the UK, Korea, the US, Japan, Hong Kong (China)… Through this, Vietnam also affirmed its position as it is always in the top 3 rice suppliers in the world, next to India and Thailand.

Rice production in Africa is not enough to meet demand

In Africa, people’s lives are very difficult. Every year residents here have to face many dangers such as volcanoes, storms, epidemics, economic and political crises, etc. They also grow rice and do gardening, but due to the barren, dry and hard land, farming is not easy. Because supply cannot meet demand, African countries have to import rice from other regions such as Vietnam, Thailand and India. Therefore, the potential for rice export from Vietnam to Africa is huge. Each year, on average, Vietnam supplies rice equivalent to about 2.2 tons to Africa.

Risks when exporting rice to Africa

Besides favorable conditions and potential, there are also many export risks in the African market, which are:

Regulatory risk

There is a major export risk in Africa, which is a legal issue. Because the geographical distance is quite far, it is not convenient to transport goods, payment methods, languages, especially fraud in transactions is quite common.

The situation of fraud in African countries can be mentioned through the form of bidding, people easily agree to buy Vietnamese goods at high prices, asking Vietnamese companies to send money to take care of procedures. Or the subject offers to sell goods to Vietnamese enterprises at low prices, and requires them to deposit… After receiving money from Vietnamese enterprises, the subject will close the website and flee.

Competition with other countries

Currently, the main rice exporting countries to this region are Thailand, India, Pakistan, Vietnam and the US, in which Thailand is still the rice supplier with the largest volume and variety of varieties.

Therefore, it is disadvantageous for Vietnam to face competition from many major rice exporting countries in the world.

Based on the article, businesses must have understood more about the current problem of exporting rice to Africa and the potentials and risks from the market.