Rice exporters decry VFA restrictions Thursday, Jul 17,2014,09:28 (GMT+7)


Prices of the fresh paddy IR50404 and the long-grain paddy for 5% broken rice in the Mekong Delta rise VND100 per kilo against last week - Photo: TL

CAN THO – Many private rice traders said at a conference on rice export in Can Tho City on July 14 that the Vietnam Food Association (VFA) is restricting rather than facilitating their rice business, especially with markets having government-to-government contracts.

Traders said they could not ship rice to Indonesia, Malaysia and the Philippines due to the presence of government-to-government contracts, often referred to as concentrated contracts, which VFA had signed with partners in such markets.

Speaking at the conference, Pham Thai Binh, director of Trung An Company, said his company’s rice export in the first months of this year has struggled.

Binh explained that food traders outside VFA were unable to export rice to the aforesaid markets due to VFA’s regulations.

Nguyen Minh Toai, director of Can Tho’s Department of Trade and Industry, said enterprises could not cut deals to export rice to the aforesaid markets while VFA was negotiating concentrated contracts with such markets. Beyond that time limit, traders could sign contracts to ship rice.

However, many enterprises reflected that they had faced VFA’s harassment when they registered to export rice to these markets, Toai said, adding that it would be difficult to gain VFA’s support.

At the event, some enterprises said Vietnam should diversify and expand its export markets for farm produce, such as Australia, Europe, Mid East, and the U.S. to avoid dependence on the Chinese market.

It was noted that while food traders joining concentrated contracts reported losses, those making private shipments were earning profits.

Food traders, however, noted at the gathering that rice export was now more difficult due to the increase of paddy and rice prices in the Mekong Delta.

Many rice traders said the prices under contracts Vietnam won at international tenders were lower than the local rice prices at the moment, so they have racked up losses.

Lam Anh Tuan, director of Thinh Phat Co. Ltd., said most companies have made heavy losses due to the low prices under a contract that Vietnam Southern Food Corporation (Vinafood 2) had signed with Malaysia.

Nguyen Thanh Phong, director of Van Loi 2 Company, said prices have been boosted as rice traders competed with one another in selling rice to China.

Rice trader Nguyen Thanh Tho in Tien Giang Province told the Daily that the rising demand for export aggravated by low local supplies has prompted traders to chase up prices.

According to traders in the Mekong Delta, the fresh paddy IR50404 and the long-grain paddy for 5% broken rice ranged from VND4,400-4,500 per kilo and VND4,800-4,900 per kilo respectively, up VND100 per kilo against last week.

The material rice of the type IR50404 is being sold for VND6,850-7,000 per kilo in Dong Thap Province’s Lap Vo District and Tien Giang Province‘s Ba Dac wholesale market, up VND100-150 per kilo versus last week.

Not only in the local market, the rice export prices in the global market have also moved up, with 5% broken rice offered at US$420-430 per ton, 25% broken rice at US$370-380 per ton and Jasmine fragrance rice at US$575-585 per ton.