Loading and unloading rice for export of Ho Chi Minh City Food Joint Stock Company (Foodcosa) at Saigon port. Photo: DINH HUE

Businesses are in trouble; locals are anxious

In Tien Giang province, in the registration of the rice export customs declaration last April, only one enterprise could declare but with low output. As the leader of one of the enterprises that cannot make customs declarations, Director of Viet Hung Co., Ltd. Nguyen Van Don expressed his concern: Currently, our company has 25 containers of fragrant rice in that are backlogged in Cat Lai port (Ho Chi Minh City) from March 23. If the failure to export continues for a long time, the company will suffer heavy losses because of the excessive costs. In addition, we also have to pay interest on bank loans, not to mention reducing the reputation of the business with foreign partners.

Phuoc Thanh II Co., Ltd (Long An province) is also an enterprise with too many goods that is stuck at the port. Mr. Nguyen Tuan Khoa, Deputy Director of the Company said: The total contracted output of rice of the company until June 2020 is 5,000 tons. From March 24 to now, the company has transported 45 containers of rice to Cat Lai port, with a total output of 1,037 tons, but it is still congested. In addition, the company has an inventory of 7,500 tons of high-quality rice purchased from the beginning of the 2020 winter-spring crop until now. Meanwhile, Long An Food Company also has 280 rice containers lying at Cat Lai port. For sticky rice, it is even more difficult because in the last export period, this item was not on the list of exported products. According to Duong Vu Co., Ltd. (Thu Thua district, Long An province), they have 30,000 tons of commercial glutinous rice and about 13 thousand tons of containerized rice stuck at Cat Lai port with a value of about VND 400 billion. Director Nguyen Quang Hoa impatiently said: If glutinous rice continues to not be exported, the company will go into bankruptcy because the company not only could not get the money but also has to compensate partners for contracts.

In Can Tho City, according to the city's Department of Industry and Trade, the amount of goods stored at the warehouses of 41 rice exporting enterprises in the area is estimated at 85,952 tons of rice and 359,411 tons of rice. The quantity of the signed contracts is about 216,776 tons of rice, of which the amount has been delivered to the port about 25,965 tons. 

Facing this fact, all enterprises propose to prioritize export support for existing consignments at the port. On the other hand, by May 2020, when there is a supply of new rice crops, submit a proposal to the Government to consider lifting export quotas to ensure the purchase of rice for farmers and create conditions for enterprises to export rice when prices are high. 

While enterprises face difficulties because they cannot export rice, the locality is also very anxious. Director of the Department of Industry and Trade of Long An province Le Minh Duc said: Long An is the third rice-producing province in the country and the leading producer of sticky rice in the country. Currently, the actual inventory of rice at enterprises in the area is about 352,322 tons. In April, there are only 7 out of 24 enterprises in the province make customs declarations promptly with an export output of about 8,500 tons; inventory is more than 343,800 tons, if adding 56 thousand tons of commercial sticky rice, the inventory will be nearly 400 thousand tons.

As for An Giang province, only 4 out of 16 enterprises could register rice export customs declarations with a total output of 3,810 tons in April. After subtracting the output registered in the declaration until April 15, contract volume for delivery in the second quarter of 2020 of enterprises that have not yet been exported is still about 99,284 tons. Ms. Tran Anh Thu, Vice Chairman of An Giang Provincial People's Committee, said: In 2020, production of the whole An Giang province reached about four million tons of rice, equivalent to about two million tons of rice. In addition, every year, the province grows 115 thousand hectares of sticky rice and about 10 thousand hectares of Japonica (round grain) rice. These two products are not consumed domestically, but are mainly exported, so the temporary suspension of exports causes many difficulties for enterprises, which easily leads to the risk of a breakdown in the production-consumption chain between farmers and business that has been implemented in the past time.

Expanding export quotas

In order to solve difficulties for enterprises and promote rice purchasing for farmers, Director of Long An Department of Industry and Trade Le Minh Duc proposed: With the current stock of rice, The province has asked the Ministry of Industry and Trade to propose to the Prime Minister to review the allocation of export quotas in a reasonable way to reduce damage to businesses while still ensuring national food security. Meanwhile, An Giang Provincial People's Committee has also proposed to the Prime Minister to consider allowing 90,727 tons of rice (including sticky rice) of enterprises in the province that have export contracts until May 2020 to be added in export quotas of rice in May 2020 of the whole country At the same time, it is necessary to have a policy to support enterprises that have rice export contracts but cannot implement these contracts... Particularly for sticky rice, the provinces with large output such as Long An and An Giang propose the Government to re-export and not limit the export quantity. As analyzed by Chairman of An Giang Provincial People's Committee Nguyen Thanh Binh: The reason the province recommends not to include glutinous rice and Japonica rice (round grain) in the group of restricted export items is because the goal of producing these two products is mainly for export and these two items are also not in the scope of mobilization into the national reserve.

Besides the recommendations of enterprises and localities on creating conditions for exporting all the rice that is backlogged at ports and planning to expand rice export quotas in the following months, the parameters of rice production and supply and demand in the country are also an important basis for deciding on rice export quotas in May 2020 as well as in 2020. Mr. Nguyen Nhu Cuong, Director of the Department of Crop Production, Ministry of Agriculture and Rural Development (MARD) Agriculture and Rural Development), said: The Ministry of Agriculture and Rural Development has been closely coordinating with ministries, branches and localities to focus on directing the implementation of solutions, ensuring the rice production plan in 2020. Thereby, the rice production in 2020 is expected to reach 43.5 million tons of unhusked rice. In which, the winter-spring crop is estimated at 20.2 million tons of unhusked rice, expected to finish harvesting before June 30; the summer-autumn crop is estimated at 11 million tons of unhusked rice; expected to focus on harvesting from June 15 to September 30; the autumn-winter crop in the Mekong Delta provinces is estimated at 4.2 million tons of unhusked rice, focusing on harvesting from September 15 to November 15; The crop is estimated at 8.2 million tons of unhusked rice, focusing on harvesting from September 15 to December 31. Regarding consumption demand and national reserve, according to forecast, domestic demand for unhusked rice is 29.96 million tons. In which, people's consumption is 14.26 million tons of unhusked rice; processing industry is 7.5 million tons; and livestock is 3.4 million tons; and for seed, backup seed about 1 million ton. In addition, the domestic reserve has 3.8 million tons of unhusked rice. With the above production and output plan, it is forecasted that from the beginning of the year, rice export output in 2020 can reach from 6.5 to 6.7 million tons of rice (equivalent to 13 to 13.4 million tons of unhusked rice).

Faced with this fact, a representative of the Ministry of Industry and Trade said that the Ministry has established an interdisciplinary inspection team led by Deputy Minister Tran Quoc Khanh, including representatives of the ministries of Finance, Agriculture and Rural Development, the Public Security and the Vietnam Food Association, in order to work with a number of relevant agencies to understand the situation on the amount of commodity rice at the ports, on that basis to make a report to the Prime Minister on the situation of rice exports in April. 2020 and rice export management plan in May 2020. The inspection team will work from April 20 to 24. 

We can see that the implementation of rice export in April had shortcomings that cause difficulties for many enterprises and affect the progress of rice purchasing of farmers. Therefore, in the coming time, it is necessary for the drastic intervention of relevant ministries in rice export management to make the right and reasonable decisions, ensuring the harmony of interests of the parties in the production chain and rice exports, while ensuring national food security, especially in the context of complicated developments of the Covid-19 pandemic. 

In the Mekong Delta, last winter-spring crop, the whole region's rice production reached more than nine million tons. The summer-autumn rice crop has been sown for more than a month, the rice is growing well and will be harvested in two months. This crop is expected to harvest about seven million tons of unhusked rice (four million tons of rice). This rice output can ensure food security and the rice export plan set out at the beginning of the year. Therefore, the Government, ministries and branches should consider allowing normal rice exports, creating favorable prices for farmers and enterprises.

Professor Vo Tong Xuan

There are costs in the process of waiting for rice products at the port including: container demurrage fees, storage charges (about 300,000 VND/container (25 tons/day); fines for late delivery; the capital is frozen while still having to pay interest on bank loans. In addition, there are some companies that also bear inspection costs because of going through the red channel, Therefore, the companies have to tow the goods to weigh with a fee of 890,000 VND/container; 200,000 VND/container seal cutting fee and it costs an additional fee for converting the container, which is 250,000 VND/container - Container in case the container need to be weighed. Particularly in Can Tho City, estimated costs of storage, storage of containers, fines, wages..., loss from 260 to 350 million VND/day for each enterprise, depending on the quantity of goods located at the port. 

Source: nhandan.com.vn