Export of 400,000 tonnes of rice with suspicious signs

	In March, imports, exports see prosperity with a turnover of more than US$46 billion
	GDVC informed the export of 400,000 tonnes of rice
	Garment and textile firms ready to export face masks to US, Europe

Mr.Au Anh Tuan

Could you tell us about businesses refusing to sign the contract supplying rice for national reserves but are on the list of businesses opening export declarations on April 12?

From 0:00 on April 12, 39 enterprises registered rice export declarations with quantity of 400,000 tonnes under quota according to the decision of the Ministry of Industry and Trade. The Customs system automatically receives, accepts the declaration and gets feedback from enterprises without intervention of customs officers, ensuring transparency. This automated system operates 24/7. On average, it takes only a few seconds to process a declaration form from registration to receiving results. This shows customs officers can’t intervene in the registration process.

However, through reviewing the number of enterprises registering export declarations, the General Department of Vietnam Customs (GDVC) detected suspicious signs.

On the list of registered export declarations, there are enterprises that have won bids supplying rice for national reserves (according to the bidding of the General Department of State Reserve), but the General Department of State Reserve said these enterprises have not signed a contract or refused to sign contracts for supplying rice for national reserves. When the customs system allows registration of export declarations, these enterprises register export declarations with quantities of thousands of tonnes of rice.

Specifically, which businesses are?

There are four enterprises in the list of successful bidders supplying rice for national reserves in 2020. For example, Viet Nam Northern Food Corporation won a bid of 4,500 tonnes, but it has not yet signed the contract. However, this company has registered eight export declarations with the quantity of 7,200 tonnes. And Phat Tai Co., Ltd won a bid of 17,940 tonnes, the company has also registered five export declarations with a total quantity of more than 13,000 tonnes.

My Tuong Joint Stock Company and Thuan Minh Import-Export Joint Stock Company are also on the list of successful bidders but have not yet signed contracts with the General Department of State Reserve. However, these companies have registered export declarations with volume of more than 10,000 tonnes. Thus, they have not complied with regulations on supplying rice for national reserves. Customs is concerned that this issue will boost the risk of not ensuring national food security and national reserves.

In addition, as per provisions of Decree 107 related to rice exports, businesses must also reserve at least 5% of total export volume in the previous six months. Therefore, these companies do not comply with the provision, causing concerns on the impact to food security in circulation as well as national reserves.

The GDVC plans to review rice exports in recent years, report to the Government and other ministries and sectors, and propose solutions to effectively control exported rice, create initiative for enterprises, avoid passivity of enterprises in registering declarations and carrying out export procedures under contracts previously signed with foreign partners.

Are there any regulations that enterprises must sign contracts for the quantity of rice won in bidding to supply for national reserves, they will be permitted for export ?

Currently, there are no regulations on this issue. Therefore, according to the General Department of Vietnam Customs, the Ministry of Industry and Trade must review the regulations on rice export management.

Instead of allocating the total monthly quota, the quota can be auctioned like for sugar performed by the Ministry of Industry and Trade. The auction is based on principles that enterprises must meet export conditions as prescribed in Decree 107. In addition, enterprises must sign contracts to supply rice for national reserves and sign contracts with an associated supermarket to ensure the circulation and reserves of at least 5% of their total export goods in the previous six months, ensuring the supply to the market as required by the Government and ministries and branches. Only when meeting these regulations, can enterprises participate in quota auctions. Thus, enterprises will be more active and when achieving quotas, they will sign contracts and register export declarations.

If complying with these regulations, pre-register customs declaration enterprises that occupy the quota of enterprises post-registering will not occur. In fact, Customs statistics show some enterprises have registered more than 100 declarations in a very short time with a quantity of nearly 100,000 tonnes (such as Intimex Group Joint Stock Company registered 102 declarations with quantity of 96,234 tonnes) and the remaining enterprises will no longer have quotas to register. It is difficult for authorities to manage, causing shortcomings for import and export activities, and enterprises have been affected because they previously signed contracts but failed to register rice export declarations.

In addition, Customs has also proposed to the Ministry of Industry and Trade and other ministries and sectors that they should inform revised policies to Customs and enterprises.

What is the risk of enterprises refusing to participate in the contract to supply rice for national reserves but on the list of enterprises opening rice export declarations?

According to forecasts of the World Food Organization, due to the impact of the Covid-19 pandemic and some factors of weather (such as saline intrusion and drought), food sources will be scarce and demand will highly increase after the pandemic. As a result, the prices of some commodities, especially agricultural products, will increase and there may be a difference between the winning bid price and the market price. Some enterprises may not sign contracts or refuse to sign contracts with the Ministry of Finance.

This fact raises the issue that the General Department of State Reserve will not buy and reserve enough foods for food security. If there is no control of the Ministry of Industry and Trade, enterprises may not have enough the reserves of at least 5% of their total export goods in the previous six months. This affects the rice supply to the market.

This will affect national food supply and security in the context of saline intrusion and drought. Therefore, the GDVC will coordinate with the Ministry of Industry and Trade and the Ministry of Agriculture and Rural Development to propose to the Prime Minister solutions to ensure interests of export enterprises as well as to ensure national food security.