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VFA allows resumption of rice exports, but prices decreasing
In an official notice released on May 5, the Vietnam Food Association (VFA) said it was now accepting new registrations for rice exports. Unfortunately, prices have been decreasing in the world’s market.
The notice said that VFA will accept registrations from enterprises which have signed export contracts but not registered delivery times. Moreover, the association will prioritise registrations from enterprises which have high export capability and abundant storage located in the big merchandise rice production provinces and from enterprises which have export contracts at high prices.
“Many days ago, when our partners came and asked to purchase rice in a big quantity and at high price, VFA announced it had halted accepting registrations for rice exports. Now, when VFA has resumed accepting registrations, the partners have gone away, looking to purchase rice from other countries,” the director of one rice export company complained.
On February 21, 2009, VFA released a notice that it had halted accepting registrations for rice export contracts.
The new notice is not being warmly welcomed by rice exporters, as it is being released at a time when rice prices have been decreasing in both the domestic and world’s markets.
The export rice price was reportedly $440/tonne for 5% broken rice earlier this year, while it has dropped to $400/tonne now. In the domestic market, the paddy price, which was VND4,500/kg earlier this year, has dropped to VND4,000/kg. Meanwhile, the rice material price has also dropped from VND5,800/kg to VND5,600/kg.
“If we negotiate with foreign partners again, we will have to slash prices by $40-50/tonne as the export price has been on the decrease,” the director added. Meanwhile, many export companies collected material rice before at high prices.
“The way VFA works with rice export contracts has been making rice export companies suffer,” he added.
VFA has sent a report to the Government Office and relevant ministries about the rice exports and explained the trouble with the export of 53,500 tonnes of rice by Kien Giang Tourism and Trade Company.
The report said that the rice exports in the last four months reached the highest ever level with 2.285mil tonnes of rice exported, an increase of 65.4% over the same period of last year. The average export price was $406.5/tonne.
It is expected that Vietnam will export 3.5-3.6mil tonnes of rice in the first six months of the year.
VFA, in its report, made some suggestions related to rice export management. It said that if it is really necessary to keep the mechanism of registering for rice export contracts, the registrations should be made to the Ministry of Industry and Trade (the registrations are now being made to VFA). Meanwhile, export price guidance responsibilities should be transferred to the Ministry of Finance.
VFA has also suggested adding representatives of People’s Committees of big rice production provinces to the taskforce on rice export management.
Regarding the trouble with the export of 53,500 tonnes of rice by Kien Giang Tourist and Trade Company, the VFA’s notice signed by VFA Secretary Chairman Huynh Minh Hue on April 29 read that the association did not make timely decisions in some cases, thus causing misunderstandings and badly influencing the association’s prestige. The prime minister criticised the VFA Chairman for the trouble with the export of the 53,500 tonnes of rice.
VietNamNet, TP
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