VietNamNet Bridge – The government has decided that the Northern Food Corporation (Vinafood 1), together with Southern Food Corporation (Vinafood 2), will be the two leads to conduct negotiations and make direct transactions with highly concentrated rice markets (where there are few exporters of rice).

Concentration markets refer to markets to which Vietnam sells rice under large contracts after attending the bids invited by government agencies.

Lam Anh Tuan, director of Thinh Phat Company Ltd, a member of the Vietnam Food Association (VFA), noted that it is reasonable to allow Vinafood 1 and Vinafood 2, the two most powerful food corporations, to act as the leads in the negotiations for rice export.

He noted that it would be better not to allow too many companies to join the negotiations on selling rice to concentration markets, because this would make it difficult for all of them to reach consensus.

However, Nguyen Ngoc De, Rural Development Faculty’s Vice Dean, does not think the government’s decision would help make a breakthrough to the rice export.

He believes that it would be better to allow more enterprises to join negotiations on rice export to concentration markets.

“If only Vinafood 1 and Vinafood 2 can do this, this would be unfair for others,” he said.

Meanwhile, some experts frankly said they doubt that the two “big guys” will be able to do their job well.

Dr. Vu Trong Khai, a renowned analyst, noted that Vinafood 1 and Vinafood 2 both have been “living off the sweat of farmers”.

“They do not care about farmers’ benefits and domestic production development,” he noted. “They just try to win bids at any cost, so they offered the surprisingly low price last April to win the bid to provide 800,000 tons of rice to the Philippines.”

“What Vinafood 1 and Vinafood 2 do is to make Vietnam’s rice cheaper in the world market,” he said.

The problem is that though they offer low export prices, the two food corporations do not take a loss, because they will buy rice from farmers at low prices.

Meanwhile, a private rice exporter in Mekong Delta, said that the current export mechanism (only one or two companies can get involved in the negotiations for export) makes it difficult for Vietnam to expand markets.

“We can satisfy the requirements stipulated in Decree No 109 on rice export management. Therefore, we must be given the right to freely export rice if we want,” he said.

“It is the farmers who suffer from the low export prices,” he said.

Dr. Le Van Banh, Head of the Mekong Delta Rice Institute, who harshly criticized the low bidding price last April, commented that it was necessary to reconsider the two corporations’ capability.

“They are very weak at trade promotion and market forecasting,” Banh noted.

Dr. Vo Tong Xuan, the most renowned rice expert in Vietnam, said that it would be better not to allow Vinafood corporations to directly get involved in exports.

They should be commissioned to develop markets and connect food companies to fulfill rice export contracts.