Ineligible rice exporters in Vietnam become suppliers

A lot of rice exporters whose licenses were revoked on September 30 have continued to engage in the trade via consignment contracts or turned themselves into suppliers of rice exporters.

Only a small number of ineligible exporters have pulled out of the rice market.

As of September 30, 117 enterprises had been qualified for rice export under Decree 109 on rice trading and export. The Ministry of Industry and Trade has granted export licenses to 100 firms, and the others will be licensed from now to the year’s end.

In 2011, there were 221 rice exporters nationwide. By the end of this July, there had been 130 left, including 71 large firms each with an annual export volume of over 10,000 tons of rice, accounting for 96% of the country’s total rice export volume.

The trade departments of several provinces have discovered many unqualified rice firms and reported to the trade ministry for license revocation.

Truong Thanh Phong, chairman of the Vietnam Food Association (VFA), suggested unqualified enterprises should entrust others to do the export job or become suppliers for eligible exporters.

“There is no need to invest heavily to avoid waste, as enterprises still have other ways to engage in rice export,” he said.

Representative of an enterprise with a milling facility in Long An said her company now exported rice via an entrusted firm as its license had been withdrawn for failing to meet the requirements. The company continues to do business with Chinese and Taiwanese partners, who are still fond of fragrant and glutinous rice.

The average rice export rice has picked up slightly. The high-grade 5% broken rice is now priced at US$455-465 per ton, US$100 lower than the same product of Thailand, but US$25 higher than Indian product.

Meanwhile, the 25% broken rice is offered at US$420-430 per ton.

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