Ministry of Industry and Trade proposes to resume rice export

On June 4, Ministry of Industry and Trade has asked the Government to resume rice exports in the context of COVID-19 pandemic, drought and saltwater intrusion after reviewing opinions of related ministries and branches regarding the rice export management plan.

Earlier, the Prime Minister assigned the Ministry of Industry and Trade to consult the Ministry of Finance, Agriculture and Rural Development and relevant agencies on rice export; and requested the Ministry of Agriculture and Rural Development, the Ministry of Finance and the concerned agencies to provide their official comments in writing to the Ministry of Industry and Trade before April 5.

On that basis, the Ministry of Industry and Trade was assigned to finalize the rice export plan and submit a report to the Prime Minister before April 6, ensuring the principle of fully meeting domestic rice demand in every circumstance. The Ministry of Finance shall urgently purchase adequate rice reserve according to the 2020 national reserve targets and plans approved by the Prime Minister to promptly respond to unexpected and urgent requirements; research to increase the reserve level if necessary.

Accordingly, the Ministry of Industry and Trade proposed to allow rice exports but strictly control monthly quota after careful consideration to ensure food security amid the COVID-19 pandemic.

The plan takes into account suitable solutions to maintain rice production, support rice consumption and rice farmers with good prices to ensure economic growth while ensuring food security. In particular, the plan was based on the official announcement from the Ministry of Agriculture and Rural Development about the rice volume of 3 million tonnes, which could be exported in the winter-spring crop. This is the remaining quantity after ensuring normal domestic consumption and reserves.

With the export rate of 25 thousand tons/day in the past 3 months given export contracts signed before 0:00 of March 24 shall be implemented, it is estimated that the rice export volume until March 31 will be around 1, 7 million tonnes. Therefore, the rice export volume in the future would be 1.5 million tonnes.

To ensure food security, in April and May Vietnam needs about 300,000 tons to be purchased in 2020 by the General Department of State Reserve. Also according to the Ministry of Agriculture and Rural Development, in addition to the 300 thousand tons, Vietnam shall need to reserve an additional volume of 400 thousand tonnes to cope with all possible situations in April and May. Accordingly, the total rice reserves by the country for the next 2 months before the summer-autumn crop will be 700 thousand tonnes.

Therefore, the rice volume allowed for export in April and May will be 800 thousand tonnes. This volume 40%, 35.7% and 21.7% lower than the export volume in April and May 2019, 2018 and 2017, respectively. According to the plan proposed by the Ministry of Industry and Trade, in the short-term, specifically in April, Vietnam will export 400 thousand tonnes of rice. However, this plan may be adjusted in the last week of April, based on disease developments and reports of ministries, branches and the Prime Minister will consider and decide the rice export plan for May.

The Ministry of Industry and Trade proposed to the Ministry of Finance to continue directing the General Department of State Reserve to urgently purchase adequate volume of rice reserves according to the assigned plan. Besides, the 20 largest rice exporters must sign agreements with at least one supermarket system to ensure sufficient food reserves for circulation.

On the other hand, the Ministry of Industry and Trade shall list and post publicly on the website of the Ministry the location where rice exporters store their 5% reserves for circulation and assign provincial/municipal Industry and Trade Departments to supervise and inspect this.

In case of dishonest declaration, the Ministry of Industry and Trade could revoke the licenses for rice exports of the respective rice exporters.