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Exporters told to desist from slashing rice prices
The Vietnam Food Association asked local businesses to stop lowering rice prices in international markets saying it is hurting the country’s exports.
Low prices offered by the association’s members were causing difficulties for others in dealing with importers and leading to serious effects on inter-governmental relations, said the association’s Deputy Chairman Nguyen Tho Tri.
Tri told the press on Monday the association has set a pricing framework that its members were to follow but many have broken it as they jostled to push out others and win import contracts.
The ceiling prices that exporters should not sell under were US$400-430 per ton but many local businesses including association members were offering lower prices, Tri said.
He said this practice would not benefit the country’s exports, given that world demand for food was not falling.
Tri said the association would apply punitive measures to those violating its guidelines, including expelling businesses from the association, not granting quotas and recommending to the Ministry of Industry and Trade that their export licenses be revoked.
He said importers assigned by their governments complained of different prices being offered by Vietnamese exporters for the same rice and blamed Vietnamese rice corporations for offering higher prices in government-to-government contracts.
The government has signed rice trading agreements with other governments like Indonesia and the Philippines and set an annual quota for rice export to the markets.
The association, including the country’s biggest state-owned rice exporters Vinafood I and II, are responsible for allocating rice quotas to local exporters.
On the other hand, the association said it planned to increase rice reserves to prevent prices from falling in the domestic market.
Rice prices in the domestic market have fallen to below VND3,800 ($0.22) a kilogram from VND4,000 ($0.23) a kilogram.
Association members will buy 400,000 tons of rice this month and increase the volume in coming months in a move to prevent the price from falling under VND3,800 a kilogram at which farmers are estimated to make a 30 percent profit.
It said this was a stop-gap measure while the association sought further directions from the government and the ministry.
Local businesses have signed export agreements for 5.4 million tons of rice and shipped 4.1 million tons of rice worth $1.69 billion as of the end of July, the association said.
Vietnam, the world’s second-biggest rice exporter, may boost shipments this year by as much as 49 percent to 7 million tons on a bumper harvest, Bloomberg quoted Do Huu Hao, Deputy Minister of Industry and Trade, as saying.
“The government is aiming to boost rice exports this year to cover drops in prices,” Hao had said last week, citing higher output in southern Vietnam, which may produce up to 10 million tons of un-milled rice. “This good harvest will enable us to ship 1-2 million tons more of the grain,” he said.
The average export price of 5 percent broken-grain, Vietnam’s best export variety, has dropped around $30 per ton over the past three months to less than $400, Saigon Tiep Thi newspaper said Tuesday.
Vietnam is trying to increase agricultural earnings to narrow its trade deficit, which totaled $3.4 billion in the January-to-July period. Vietnamese shipments of rice last year were 4.7 million tons, Bloomberg reported, citing government figures.
Minh Quang
thanhnien
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