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Rice exporter threatens to ask PM to help ‘rescue’ rice
The Kien Giang Tourism and Trade Company, which is now facing problems exporting 53,500 tonnes of rice under a contract it signed before, has threatened to report the case to the prime minister.
Deputy Chairman of the Kien Giang People’s Committee Ha Van Phong told local newspaper Tien phong on April 15 that if the Vietnam Food Association did not allow the Kien Giang Tourism and Trade Company to deliver the volume of rice under the signed export contract, the local authorities and the company would petition the Prime Minister and relevant ministries for intervention.
The story began one month ago. The Kien Giang Tourism and Trade Company signed several contracts with foreign partners on the export of 53,500 tonnes of rice. The deliveries were to be made in April 2009 at the latest.
The volume of rice will be exported to Africa and East Timor. The foreign partners have opened letters of credit and their ships have docked at the ports in HCM City and An Giang province to get the deliveries.
While the Kien Giang Tourism and Trade Company was fulfilling formalities for the deliveries, the Vietnam Food Association on February 20, 2009 released a notice that as of February 21, 2009, the association only accepts registrations for rice export contracts with deliveries from July 2009 to September 2009.
Meanwhile, according to Nguyen Hung Linh, the company’s General Director, the company signed contracts before the notice was released. The total contracted volume was 130,000 tonnes, of which 53,500 tonnes need to be delivered in March and April 2009.
Linh added that these are the company’s loyal clients.
“As exports are stuck, we have to bear bank interest rates, pay fines for long days of ships sitting at docks. Meanwhile, the rice stocks are now full, which makes the company unable to collect paddies from farmers,” he said.
“The foreign partner has threatened to bring the case to international court for violation of the contract,” he added.
Over the last one month, the Kien Giang Tourism and Trade Company has sent many documents to the association and relevant ministries, asking for the permission to export the 53,500 tonnes of rice under signed contracts.
In the dispatch to the Kien Giang People’s Committee, the company wrote that the way the Vietnam Food Association’s chairman was managing the rice exports was unfair to rice export companies.
In related news, the Long An-based Lafooco, specialising in processing farm produce for export, has suggested a plan of exchanging Vietnamese rice for African cashew nuts.
Lafooco’s General Director Nguyen Van Chieu said that the plan was expected to be submitted by the Vietnam Cashew Association to the ministries of agriculture and rural development, and trade and industry this month.
Chieu said that the exchange would help businesses cut expenses as rice exports and cashew nut imports would not have to go through third parties. This would help cut down transport costs by 30%, while Vietnamese rice could find new markets.
To date, Vietnamese enterprises have to import cashew materials through brokers from India and Singapore. They have to pay $70-100/tonne to brokers.
The idea was suggested after Vietnamese enterprises found out that African partners had a demand for large quantities of rice.
Thirty businesses in Long An province, specialising in making cashew nuts for export, which export $100mil worth of products a year, have to import material cashew nuts from Cambodia and African countries, some 50,000 tonnes per annum.
vneconomy
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