Who is allowed to export rice during the COVID-19 crisis?

The total amount of rice that Vietnamese exporters have to deliver to partners under contracts from now to the end of May is 1.385 million tons.

In the latest document to the government, the Ministry of Industry and Trade (MOIT) reported that after collecting rice for storage, Vietnam would have 800,000 tons of rice in April and May that could be exported.

The ministry asked the government to resume rice exports, provided that the export volume will be controlled monthly. In the immediate time, it proposed to export 400,000 tons in April. Meanwhile, the export volume for May will be determined in the last week of April.

However, the problem is that the total amount of rice Vietnamese companies promised to export under the contracts they signed with partners until March 27 has reached 1.665 million. The companies include the members of the Vietnam Food Association (VFA) and non-VFA companies which MOIT requested to report.

In the latest document to the government, the Ministry of Industry and Trade (MOIT) reported that after collecting rice for storage, Vietnam would have 800,000 tons of rice in April and May that could be exported.

Of this amount, at least 1.385 million tons will have to be delivered from now to the end of May. 

So, a question has been raised about who will be allowed to export rice and who will have to wait.

A former leader of Vietnam's food industry said the principle ‘first come first served’ doesn’t work in this case, because Vietnam is applying an open export mechanism.

Nguyen Van Thanh, director of Phuoc Thanh IV Trade Company in Vinh Long province, said "enterprises will feel depressed if the allocation mechanism is not transparent and fair."

In the past, rice exporters complained about the export quota allocation scheme, believing that there was discriminatory treatment among enterprises.

A director of a rice export company in Long An province suggested that in the immediate time, MOIT should allow contracts that have opened L/C (letter of credit) to ‘go ahead’.

The businessman went on to say that it’s necessary to help enterprises free their goods being stored at ports, because the long storage costs them a lot of money.

Vietnam began suspending rice export on March 25 as MOIT believes that rice should be kept for domestic consumption in the context of Covid-19.

Meanwhile, enterprises have repeatedly asked the government to resume rice export.

As Vietnam left the rice export market, Thailand has become the only rice exporter and Thai businesses have pushed the export prices up.

Thai 5 percent broken rice was offered at $466-470 per ton on March 25, while it surged to $568-572 per ton on April 7. 25 percent broken rice price also increased from $441-445 per ton on March 25 to $518-522 per ton on April 7.