Firms oppose rice export monopoly
Firms are complaining that the Vietnam Northern Food Corporation and Southern Food Corporation are monopolising markets as they are banned from signing contracts prior to the giant businesses getting first option.
"VFA asked other traders to not negotiate or sign contracts or let other parties operate in those markets from June 6 until the two corporations complete their transactions," the document stated.
VFA said violators would be reported to the Ministry of Industry and Trade.
Many locals firms said the documents gave monopoly powers to the two corporations. Not only will other firms lose partners and market share, the Vietnamese rice export industry could be affected.
Pham Thai Binh, director of Trung An Hi-Tech Farming JSC, said, "This regulation does not make sense. Our commercial contracts don’t have any relation to the contracts between two countries. This is against the right to do business."
Nguyen Van Don, head of Viet Hung Company, said VFA issued the document every year when they started negotiations with certain markets. Only when the auctions ends are other firms allowed to resume their export activities. It is speculated that VFA was concerned that other firms may sell their rice too cheap and create competition.
However, it has been said that the two corporations have failed to necessarily bring benefits to Vietnam. In May, the Vietnam Northern Food Corporation agreed to export rice at the low price of USD356 per tonne to Malaysia. Whichever companies are assigned to work on that export contract could face losses. But if they don't work, their overall export quota will be cut.
The more markets Vietnam has inter-government contracts with, the more difficulties other firms will face.
Following the strong opposition, VFA then issued a document to let commercial firms resume exports to those markets.
However, representatives of many firms said this was not enough and the VFA and the Ministry of Industry and Trade must remove obstructions to export firms and limits on their rights to do business.
Nguyen Thanh Long, director of Gao Viet Company said, "The management needs to change. For example, before signing the contracts, the member firms should be informed of the prices to see if they’re too low, how many tonnes will be exported to see if there are enough stockpiled."
Nguyen Duc Thanh, head of the Vietnam Institute for Economic and Policy Research, agreed that small companies shouldn't be banned from business. Inter-government contracts must gain approval of all members.
The Ministry of Industry and Trade must develop criteria on how to become a leading wholesaler.
There are also many opinions that the regulations are costing export firms business opportunities while farmers sit on huge supplies.
Rice export firms opposing the ban
"VFA asked other traders to not negotiate or sign contracts or let other parties operate in those markets from June 6 until the two corporations complete their transactions," the document stated.
VFA said violators would be reported to the Ministry of Industry and Trade.
Many locals firms said the documents gave monopoly powers to the two corporations. Not only will other firms lose partners and market share, the Vietnamese rice export industry could be affected.
Pham Thai Binh, director of Trung An Hi-Tech Farming JSC, said, "This regulation does not make sense. Our commercial contracts don’t have any relation to the contracts between two countries. This is against the right to do business."
Nguyen Van Don, head of Viet Hung Company, said VFA issued the document every year when they started negotiations with certain markets. Only when the auctions ends are other firms allowed to resume their export activities. It is speculated that VFA was concerned that other firms may sell their rice too cheap and create competition.
However, it has been said that the two corporations have failed to necessarily bring benefits to Vietnam. In May, the Vietnam Northern Food Corporation agreed to export rice at the low price of USD356 per tonne to Malaysia. Whichever companies are assigned to work on that export contract could face losses. But if they don't work, their overall export quota will be cut.
The more markets Vietnam has inter-government contracts with, the more difficulties other firms will face.
Following the strong opposition, VFA then issued a document to let commercial firms resume exports to those markets.
However, representatives of many firms said this was not enough and the VFA and the Ministry of Industry and Trade must remove obstructions to export firms and limits on their rights to do business.
Nguyen Thanh Long, director of Gao Viet Company said, "The management needs to change. For example, before signing the contracts, the member firms should be informed of the prices to see if they’re too low, how many tonnes will be exported to see if there are enough stockpiled."
Nguyen Duc Thanh, head of the Vietnam Institute for Economic and Policy Research, agreed that small companies shouldn't be banned from business. Inter-government contracts must gain approval of all members.
The Ministry of Industry and Trade must develop criteria on how to become a leading wholesaler.
There are also many opinions that the regulations are costing export firms business opportunities while farmers sit on huge supplies.
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