VietNamNet Bridge – How would Vietnam behave towards the Chinese market in continuing to export rice to China to clear the big stocks, or stop the export in anticipation of high risks?

Dan Viet newspaper has quoted its sources as saying that the Ministry of Industry and Trade (MOIT) is going to ask the government for a mechanism on exporting rice to China across the Lao Cai province’s border gate, which would be implemented on a trial basis in the time to come.

A senior official of the ministry said that if the mechanism is approved, this would serve as an effective solution to “save” Vietnam’s rice, the price of which has been decreasing recently. Besides, this would pave the way for more Vietnam’s rice to penetrate deeper into the market with one billion consumers.

Meanwhile, MOIT in October 2013 raised warnings about the high risks to come from the sharp increase in the rice exports across the border gates to China.

Commenting about this, analysts said the ministry still wants to push up the rice exports to China, a vast market, especially when Vietnam is meeting big difficulties.

Tran Thanh Hai, Deputy Director of the Import-Export Department under MOIT admitted at a recent conference that Vietnam’s rice exports now face the stiff competition from Thai, Indian, Pakistani and Cambodian exporters.

However, the analysts said MOIT, anticipating the risks, plans to keep a stricter control over the exports in order to minimize risks for businesses and prevent trade frauds.

Prior to that, Tran Tuan Anh, Deputy Minister of Industry and Trade, answering the interview of Hai Quan newspaper, expressed his worry about the strong rise in the rice exports to China across the border gates.

“The sharp increases in the rice exports through this channel would put pressure on the prices of the rice exports through official channels and would harm the Vietnam-China trade relationship, once the two countries have signed the agreement on cooperating to push up the export through official channels,” he said.

Anh also said that the export across the border gate would hinder the efforts of Vietnam to build up its rice brand. Once Vietnamese enterprises do not pay attention to upgrade the rice quality, they would be on the defensive in setting up their export prices.

Minister of Industry and Trade Vu Huy Hoang has said on local newspapers that the plan of Thai to sell rice in large quantities to clear the big stocks would be a big challenge to Vietnam’s rice.

However, Hoang noted that Thai rice, which has been stored for a long time, cannot keep the original quality. This would make Thai rice less competitive than Vietnamese rice.

He has also reassured the public that MOIT has signed the concentrated contracts on exporting rice in large quantities to Indonesia (1 million tons) and the Philippines (1.5 million tons).

“At least Vietnam would be able to export 4-4.5 million tons of rice this year under the government’s agreements. Besides, Vietnam would also export rice to Cuba, about 400,000 tons,” Hoang said.

Dat Viet