Vietnam to export rice to India, with conditions

The Vietnam Food Association (VFA) admitted that a rice export contract with India would be a good opportunity for Vietnam. VFA also revealed that Vietnam will not hurry to sell rice to India, since rice prices keep raising and world demand remains very high.


The Indian Press Trust reported on November 4 that the Government of India plans to import some two million tons of rice from Vietnam and Thailand because of India's decreasing rice output.

 

Questions have been raised about Vietnam's ability to provide rice considering the nation already has signed contracts to export six million tons of rice already and the typhoon severely damaged the central region.

 

VFA Deputy Chairman Nguyen Tho Tri affirmed that Vietnam is more than capable of exporting rice to India.

 

Tri, in an interview with newspaper Thoi bao Kinh te Saigon, said: "I'm sure that the rice stocks among farmers are more than enough to sell to India."

 

He has also reassured the public that the delivery date will coincide with Vietnam's winter-spring crop harvest in January and February 2010, when the supply will be bountiful.

 

Tri said that in a working session with Indian diplomatic agencies, VFA learned that India plans to purchase three million tons of rice, not two million tons as previously reported.

 

In fact, Tri explained, Vietnam can supply more than white rice to India, which accounts for 20-30 percent of the total sum of three million tons.  This means that the volume of rice demanded by India from Vietnam is not overwhelming for Vietnam.

 

According to Tri, Vietnamese enterprises have lowered their sales to India recently due to business difficulties with the market. Under Indian regulations, rice exports must be examined at the destination port and the results will be released one or two months after the exports arrive. (Other rice importers authorize quality examinations to be conducted by Vietnamese inspection agencies at the departure port).

 

Payment will be made only after the examination results. Under international practice, after rice is loaded onto ships, exporters receive payment through a letter of credit (L/C).

 

If India concludes that the rice has low quality and refuses to accept the products, then exporters must keep goods at destination ports or ship them elsewhere, resulting in exporters having to "bury" their capital in the rice exports.

 

Tri noted that, if Indian importers change their regulations, Vietnam will be able to export rice to India.

 

"The key issue is the price. World demand is increasing. We do not have to sell to India at any cost," Tri acknowledged.