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Food security top priority: VFA
Truong Thanh Phong, Chairman of the Vietnam Food Association (VFA), explained the troubles in the export of 53,500 tonnes of rice by the Kien Giang Tourism and Trade Company.
Phong said:
In 2009, Vietnam strives to export 4.5-5mil tonnes of rice. Therefore, VFA decided that the tentative rice exports in the first six months of the year would be 2.8-3mil tonnes. However, after considering the productivity of the winter-spring crop in Cuu Long River Delta, the figure was raised to 3.4mil tonnes.
By mid February 2009, after realising that local rice enterprises had committed to export a large volume of rice under signed contracts, VFA, after conferring with the prime minister, on February 20 released a notice that it had halted accepting registrations for contracts with delivery prior to the end of June 2009.
Why did VFA have to halt accepting registrations for new contracts so suddenly?
We had to do that as the volume of rice local enterprises had committed to export under signed contracts had reached 3.6mil tonnes by that time, higher than the plan. If we had continued accepting registrations for rice export contracts, we wouldn’t have had enough rice to deliver to importers. This, if it happens, badly affects the prestige of enterprises, causes disputes, and affects food security as well, as local enterprises have to collect rice from all sources for export contracts.
After February 20, VFA received many new registrations for rice export contracts with the total tentative export volume of 345,000 tonnes. If we had accepted the registrations, the total export volume in the first half would be 4mil tonnes, far exceeding domestic production capability.
This sometimes happens that enterprises sign contracts with foreign partners, but they are not allowed to export. What should enterprises do to avoid this?
In early March 2009, when some foreign partners did not implement the contracts they signed with Vietnamese enterprises, with the total volume of 20,000 tonnes, VFA then allowed the Kien Giang Tourism and Trade Company to export 10,000 tonnes, or ½ of the volume, and allowed other rice exporters in the north to export the other 10,000 tonnes. After that, VFA, once again, permitted the company to export another 53,000 tonnes.
I have to remind you that the export companies in Kien Giang province only registered rice export contracts on February 23, or three days after the VFA released the notice about the halting of accepting new registrations. The companies registered to export 146,000 tonnes, and the Kien Giang Tourism and Trade Company alone registered 130,000 tonnes (the contracts were signed between February 18-20).
The regulations on rice export management by VFA clearly stipulate that the contracts local enterprises sign with foreign partners have to include a provision about the registration of the rice export contract with VFA. The provision needs to clearly stipulate that the contracts will only be valid if the export contracts are accepted by VFA. The Kien Giang Tourism and Trade Company, a member of VFA, knows these regulations well.
VietNamNet, TT
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