New Rice Trade, Export Decree in the Pipeline

Vietnamese policymakers, analysts and businesses gathered in HCM City on Nov 14 to discuss ways to develop new decree on trade and export of rice, which is one of the Vietnam’s strategic commodities.

Deputy Prime Minister Hoang Trung Hai stressed that the decree aims to create a strong legal corridor to overcome existing weaknesses and ensure rice export activities will be carried out in a sustainable and stable manner. The decree will benefit both farmers and exporters as well as improve Vietnamese rice competitiveness, the Voice of Vietnam Radio said.

Deputy Minister of Industry and Trade Nguyen Thanh Bien said the current mechanism has provided great support to businesses in rice trade and exports.

To date, 205 businesses have been licensed to export rice, helping expand outlets for farmers and increase the amount of rice on the market. Despite market difficulties, rice exports have met the target set for the 2008-2009 crop in terms of both volume and value.

However, he admitted that the management of rice exports revealed weaknesses, especially when there were wild fluctuations in market prices.

Truong Thanh Phong, chairman of the Vietnam Food Association said Vietnam’s rice exporting companies’ capacity is too small, with only 57 of them being able to export 10,000 tons/year.

Many businesses do not have warehouses and processing workshops and they only export when they sign contracts with importers, putting farmers at a disadvantage. Meanwhile, the decree stipulates that exporters must have at least one husking facility with capacity of ten tons of rice per hour and a 5,000-ton warehouse.

Policymakers and businesses proposed a new mechanism, which focuses on reorganizing the network of key exporters, clarifying their responsibilities towards purchasing rice from farmers, negotiating and making public prices, and imposing heavy fines on regulation violators. They agreed to tighten the licensing of businesses eligible to export rice.

Professor Vo Tong Xuan suggested that the new mechanism meet the three criteria: the volume and quality of rice, farmer interests and food security. Meanwhile, Pham Van Bay, director of An Giang Food Import-Export Company, said that the standardization of key export businesses will help stabilize market prices. (VOV, Vietnam Agriculture)

Tags: Vietnam business news, Vietnam rice export