Rice exporters’ fears grow

The Ministry of Industry and Trade (MoIT) just announced it honoured export licences to 40 local firms and four joint ventures, while the Vietnam Food Association (VFA) expected around 80 firms would receive the licences as of October 1, 2011 when the Decree 109 came into force.

In light of Decree 109 dated November 4, 2010 and effective from October 1, 2011, to become eligible for rice export, businesses must have at least a specialised rice store with a minimal carrying capacity of 5,000 tonnes and a rice dehusking facility with capacity of at least 10 tonnes per hour positioned in the same location.

VFA chairman Truong Thanh Phong said after October 1 firms not up to scratch should act as satellite suppliers for licenced firms.

“Smaller firms should authorise their export contracts to bigger firms having export licences.  It is necessary to observe Decree 109 to ensure market stability, while reflecting corporate responsibility towards consumers and producers,” said Phong.

Southern Long An Department of Industry and Trade deputy director Nguyen Xuan Hong said scores of province-based firms had no drying machine systems though they all have big stores of 40,000 tonnes. Besides, many firms are starved of capital or found it difficult to lease space.

“A lot of firms will have to concede their contracts to others,” said Hong.

Echoing this view, An Giang province deputy chairman Huynh The Nang assumed the state should relax regulations allowing firms having leasing contracts with the entities meeting Decree 109 requirements to further embrace rice exports.

Nang also proposed the MoIT extend the Decree 109 deadline to help smaller firms access rice export profits.

From the business community, a Kien Giang Food Company representative assumed Decree 109’s requirements were impractical arguing that many firms did not have a complete storehouse, dehusking and drying system in one place as required in Decree 109 but they could still ensure efficient rice processing and transportation.

“It was unreasonable such firms can not get export licences in light of Decree 109 regulations,” said the representative.

Reality shows that Vietnam's rice export in the first seven months of 2011 rose to a record 4.62 million tonnes and fetched $2.18 billion, according to VFA.

It represented an increase of 16.72 per cent in volume and 26.07 per cent in value compared with the same period last year.