Philippines suspends rice imports for 60 days, worried that 40% of Vietnam's rice exports will be blocked

The Vietnam Food Association (VFA) has just sent an urgent report to the Ministry of Industry and Trade about the risk of many rice exporting enterprises facing difficulties, after the Philippines, the largest consumer market, suddenly announced a temporary suspension of imports for 60 days starting September 1.

According to a source from the Philippine Department of Agriculture , the country's Agriculture Minister recommended increasing tariffs and suspending rice imports because imported rice is causing great damage to domestic production, possibly even forcing many domestic mills to close.

On August 6, the President of the Philippines officially signed a decision to suspend imports for two months to protect farmers from the sharp drop in rice prices during the harvest season.

In the document, Mr. Do Ha Nam - Chairman of VFA - said that the Philippines currently accounts for 40-45% of Vietnam's total annual rice export turnover.

Closing this market will cause many signed contracts to be delayed, increasing inventory and liquidity pressure for businesses, especially during the peak harvest season in August and September.

Without outlets, domestic rice prices are at risk of falling, dragging down farmers' profits.

Currently, many export contracts to the Philippines cannot be delivered because the Philippines has not completed quarantine procedures (SPS). If the ban is prolonged, inventories will swell, export prices will decrease and businesses may suffer heavy losses.

VFA is also concerned that high interest rates and value-added tax (5%) applied from July 1, 2025 will further strain businesses' cash flow.

The Association recommends that the Ministry of Industry and Trade soon send a diplomatic note to the Philippine Ministry of Agriculture to find a solution to maintain exports or at least provide clear instructions on the types of rice subject to the ban.

Vietnam and the Philippines currently have a memorandum of understanding on rice trade cooperation signed on January 30, 2024, effective until December 31, 2028.