Vietnam Southern Food Corporation (Vinafood 2) has rejected a news report that the firm had bribed a Filipino official to win a government-to-government rice export contract in April.

Filipino minister accused of taking bribes in rice-contract deal with Vietnam

Bribe giving is impossible at such an international competitive tender, Nguyen Ngoc Nam, deputy general director of Vinafood 2, told the Daily after the news appeared on www.oryza.com, a popular website on global rice markets.

According to the website, a Philippine agriculture official allegedly struck a “midnight deal” with Vinafood 2 in April this year to hand the firm a contract to supply 800,000 tons of 15% broken white rice between May and August this year.

However, Nam turned down the allegation, explaining that this was an international tender, so anyone offering the lowest bid would win the contract. The Philippines has organized rice auctions many times with bidders in the region such as Thailand, Cambodia, India and Pakistan sticking to the rule.

There might be some internal disputes in the Philippine agency, Nam told the Daily via telephone last Friday.

In April, Vietnam won the bidding to supply 800,000 tons of 15% broken rice to the Philippines.

Vinafood 2 offered an average Cost, Insurance and Freight (CIF) price of nearly US$439 per ton, lower than those of other bidders by around US$30 a ton. Cambodia and Thailand bid for US$469 and US$474 per ton respectively.

Between 2001 and 2003, Indonesian media reported that Vinafood 2 gave kickbacks to an official of Indonesia’s state food procurement body Bulog to obtain a rice export contract.

Vinafood 2 then denied the allegation, saying the governments of the two countries had signed the rice purchase contract in 2001 and that Vinafood 2 was just chosen to implement the deal.

Rice shipments to Philippines behind schedule

*Vietnam has been able to ship only 118,000 tons of rice to the Philippines more than one month after winning the 800,000-ton contract, much lower than the goal of 200,000 tons a month.

Pham Van Bay, vice chairman of the Vietnam Food Association (VFA), said local enterprises exported 493,000 tons of rice to the Philippines in the first five months of this year, including part of the 500,000-ton contract in 2013 and part of the 800,000-ton contract this year. In May, Vietnam exported just 118,000 tons to the Philippines, far below the target of 200,000 tons each month.

However, Bay said Vietnamese exporters have not been fined for failing to meet quality requirements. Earlier, the National Food Authority (NFA) of the Philippines announced it would fine Vietnamese firms if they failed to meet the broken ratio, with fines of US$3 for a ton of rice whose broken ratio surpasses 1% and US$6 for 2%.

Some enterprises sought approval from VFA to pull out of the contract due to strict quality requirements and fears of possible losses. However, Vinafood 2 and Vietnam Northern Food Corporation (Vinafood 1) have encouraged them to implement the contract to protect the nation’s prestige, Bay said.