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PROJECT “NETWORK FOR AGRICULTURE AND RURAL DEVELOPMENT
THINK-TAKS FOR COUNTRIES IN MEKONG-SUB REGION” (NARDT)

c. Market diversification

Like the trend in diversification of exported rice, Vietnam and Thailand are
among countries have the most diversified market destination whereas Laos depended
on just several small markets. In general, China is the biggest buyer of the 4 countries,
accounting for a up to 61% of Laos (Figure 13). Besides China, Africa countries also
accounted for a high number of shares in the output markets of all 4 countries.
Whereas Vietnam is finding its way to penetrate EU 27, this is the principal trade
partner of Cambodia, Lao PRD and Thailand during 2016 – 2020 periods. Although
tariff barriers have been reduced, countries have increased non-tariff barriers. For
example, one of Viet Nam’s traditional markets, the Philippines, has introduced new
food safety standards for Vietnamese rice and plans to send a delegation to Viet
Nam to inspect food safety at rice factories in the early 2020 but postponed due to
covid (Quang, 2020). EU 27 applied safeguard measures on Cambodia rice since 2018
till 2022 due the surge in rice imports from this country. The safeguard regulations
required Cambodia to pay import duty of €175 ($200) per ton in the first year, €150
per ton in the second, and €125 per ton in the third. In addition, the linkage in the rice
chain in Cambodia, Laos and Vietnam is not sustainable, the linkage between farmers
and businesses has improved, but the proportion is low and unstable. Weak linkage
leads to difficulties for export enterprises to control and trace the origin and quality
of rice.
Figure 20: The structure of destination markets of rice export by value

Source: Lao PDR report – MAFF, Aseanstat.

The importing markets for Thai rice become more concentrated, but it remains
diluted over the past few years. China, the US, and Benin are the largest importer,
but their proportion in total export value is just less than 25%. In 2020, South Africa
becomes the second largest partner of Thailand whereas the other countries remain
little change. However, the export to the European market is predicted to increase as
Thailand’s premium rice products are having better chances for export to the EU after
the bloc allowed zero-tariff rice imports of 24,883 tons for October 2021.

For Vietnam, the market share of Southeast Asian countries including the
Philippines, Malaysia, Singapore, and Indonesia are still the main markets accounting
for more than 40% market share. This is followed by traditional African markets such

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