In light of a recent bid success, industry insiders are calling for the establishment of a minimum export price for Vietnamese rice to prevent price wars and ensure fair competition. Vietnamese exporters recently secured a contract to supply Indonesia’s State Logistics Agency with 100,000 tonnes of rice for a total of US$55 million.
The winning bid, priced at $563 per tonne, was notably lower than both the initial bid price and the domestic rice price listed by the Vietnam Food Association (VFA). This has prompted calls for regulatory measures to stabilize prices and protect the interests of exporters and farmers.
Huỳnh Thị Bích Huyền, chairwoman of an import-export company based in the Mekong Delta province of Cần Thơ, emphasized the need for solidarity among rice exporters. She proposed that established corporations could represent Vietnamese rice exporters in bidding wars and later distribute secured contracts among themselves. This strategy aims to prevent undercutting and maintain profitability for all stakeholders.
Huyền stressed the importance of achieving a balance between winning contracts and maintaining healthy profit margins. "Winning low-priced contracts can be counter-productive and may lead to losses for both exporters and farmers," she warned.
However, some industry voices advocate for allowing exporters the freedom to negotiate prices with their buyers. Nguyễn Việt Anh, director-general of a food company, argued that flexibility is essential in a free market. "Rigid pricing rules could result in losing contracts altogether," he noted.
Deputy Minister of Industry and Trade, Phan Thị Thắng, highlighted ongoing government efforts to improve regulations governing the rice industry. Thắng urged exporters to actively monitor global markets, understand their partners, and reinforce cooperation to avoid unhealthy competition and market disputes.
Following the announcement of the Indonesian contract, the Export-Import Department under the Ministry of Industry and Trade requested a report from the Vietnam Food Association regarding the bidding prices. The VFA was instructed to implement measures to protect the domestic rice market and maintain the reputation of Vietnamese rice globally.
A representative from the successful bidder reassured that all bids were carefully considered to ensure mutual benefits for exporters, farmers, and the long-term development of Vietnam’s agricultural products.
The VFA Chairman noted that Indonesia's strategy of dividing orders into smaller tenders has increased competition and pushed prices down. Despite this, Vietnam continues to thrive as Indonesia’s second-largest rice export market, with exports reaching nearly 1.2 million tonnes last year.
As Indonesia plans to import approximately 3.6 million tonnes of rice in 2024, up from their initial target, Vietnamese rice exporters are optimistic about future opportunities.
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