The Vietnam Chamber of Commerce and Industry (VCCI) is concerned about the Ministry of Industry and Trade's (MoIT) proposal to limit imports of low-quality rice. In a draft amendment to Decree No. 107 on Rice Trade, which is currently under consultation, the MoIT has proposed management regulations for rice imports, particularly low-quality rice imports from foreign markets.
Without adequate and timely management and statistics, a
sharp increase in rice import volume will potentially affect domestic
production and indirectly affect food security, MoIT explained.
The MoIT emphasized the importance of issuing management policies on rice imports according to volume, price, type, market, importer and import border gate criteria. This will help the state management agencies to proactively and promptly control and manage the rice import activities in every period.
In the draft amendment, the ministry has suggested stiffer penalties for rice traders who fail to prepare quarterly and annual reports on exports and inventories as required. In the last three years, many rice exporters have incompletely reported or failed to report their export contracts, implementation of their contracts and quarterly and annual inventories. This creates many difficulties for the state's rice export management.
But according to VCCI, the draft did not provide clear
criteria for assessing any increase in imports that could affect domestic
production and did not specify what measures were to be taken.
“The application of import restrictions might affect
domestic manufacturers, increasing production costs, leading to input shortages
and reducing the competitiveness of Vietnamese goods,” VCCI said.
It added that “import management measures if applied, should consider the needs of businesses that use raw materials for their production”.
Last year Vietnam imported nearly one million tonnes of rice from various countries. Of the total, 72% came from India and was mainly used to make noodles, cakes, animal feed, beer and liquor. Amid the controversy over low-quality rice imports, Vietnamese rice exports continued to increase over the past 11 months.
Statistics from the Ministry of Agriculture and Rural Development (MARD) showed that 600,000 tonnes of rice were shipped abroad in November, earning the country US$296mil (RM1.3bil). The latest addition brought the volume of rice exported overseas in the 11-month period to 6.69 million tonnes, valued at US$3.24bil (RM14.35bil), up 16.3% and 7% year-on-year.
According to the MARD’s agricultural product market bulletin
in November 2022, the exported price of Vietnamese 5% broken rice was US$438
(RM1,939) per tonne, US$13 to US$28 (RM58 to RM124) higher than that of
Thailand and US$60 to US$65 (RM266 to RM288) higher than that of India.
The ministry attributed these increases to a decrease in
supply amid increasing demand, especially for high-quality rice products from
European markets and rising demand for fragrant rice in other major markets
such as the Philippines and China.
It added that Vietnam’s rice exporters saw traditional rice buyers, the Philippines, increase imports from 2.9 million tonnes to 3.4 million tonnes. The Chinese market also shifted from importing a small volume of rice from Vietnam at the beginning of the year to a large volume at the end of the year.
Meanwhile, some European countries tended to import more rice to replace the reduced supply of wheat due to the Russia-Ukraine conflict. Trade experts said that prices of Vietnamese rice would continue to stay high as economic and political uncertainties would push up food demand. They suggested exporters utilize opportunities for market access and expansion.
If the export volume was maintained at over 400,000 tonnes
in the remaining month, the whole year’s export volume of the staple would
reach between 6.8 and seven million tonnes, they said.
Export businesses were urged to pay due attention to China, a large and promising market for Vietnamese agricultural products. Recently, China has changed import requirements from plant quarantine to packaging, origin tracking and increasing area codes.
A total of 22 Vietnamese firms have been granted licenses to ship rice to China, and Vietnam has offered China to expand the list. Apart from China, the European Union and the United Kingdom also remain important markets for Vietnam, experts said, suggesting exporters strengthen their linkages with purchasing and processing units to meet the technological requirements of importers, thus making better use of free trade agreements and export quotas.
Source:
Online/SZK
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