MoIT proposes abolishing quota mechanism for rice exports from May 1

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Illustrative photo.

The MoIT has senta dispatch to the PM to propose the rice export management plan in May 2020 and in the near future both perform well the task of ensuring food security and maintain production and economic growth in line with the current situation that Covid-19 is controlled in Vietnam.

The MoIT said by the end of April 2020, the most important factors that led to the restriction of rice exports at the end of March has changed for the better.

Regarding rice supply, the winter-spring crop in the northern and northern central regions has been stable and is being harvested smoothly; the winter-spring crop inthe south central coast region and Central Highlands has basically harvested.

According to areport from the Ministry of Agriculture and Rural Development at the working session on April 22, the winter-spring crop in 2020 in the Mekong Delta has achieved the rice output as forecasted. It predicted Vietnam could export about 3.2 million tonnes.

The volume of paddy in the summer-autumn crop is estimated at 11 million tonnes, of which it is estimated 8.7 million tones are from the Mekong River Delta. The volume of exported rice in the summer-autumn crop is estimated at 2.3-2.4 million tonnes.

The quota of rice allowed for export in April was 400,000 tonnes and added 100,000 tonnes in advance under the direction of Deputy Prime Minister Trinh Dinh Dung in Notice No.163/TB-VPCP dated April 21, 2020 of the Office of the Government.

However, on April 24, rice exports reached 185,634.59 tonnes. Based on clearance capacity of the current international border gate system, rice exports in April areexpected to fluctuate in the range of 300 - 350 thousand tonnes. From the beginning of the year to the end of April, rice exports areestimated to reach a maximum of 1.9 million tonnes.

With estimated total volume of exported rice of 3.2 million tonnes and after subtracting the estimated volume of rice exported in the first four months of 2020, the MoIT said the remaining volume of rice can be exported from the beginning of the May to mid-June atabout 1.3 million tonnes (excluding the volume of rice added from early harvesting in some areas in the second half of May, expected about 100,000hectares).

Through monitoring of the MoIT, within the past fiveyears, with the current clearance capacity of the international seaports and border gates, Vietnam has never exported 700,000tonnes of rice per month.

Thus, even if 700,000 tonnes of rice is exported in May, Vietnam still has at least 600,000 tonnes in stock in the first half of June, before adding the supply from the bumper summer-autumn crop. This is a basic difference between supply and demand of rice compared to the end of March 2020.

“It can be affirmed that we have achieved the goal of restricting the rice export to ensure national food security amid the most complicated period of the Covid-19 pandemic," the MoIT said.

The MoIT, ministries and sectors have agreed to propose the Prime Minister abolish the quota mechanism for rice exports; allow exporting rice as normal and continue to comply with provisions of Decree No. 107/2018 / ND-CP on rice export business.

To maintain and ensure food security, contributing to the effective implementation of the rice export management goal in Decree No.107/2018/ND-CP, the MoIT has also proposed that rice exportsareonly conducted via international border gates (land, rail, sea, waterway and aviation).

It has proposed the National Steering Committee 389 and the Ministry of Finance direct the General Department of Vietnam Customs; the Ministry of Defence to direct the Border Guard force; the Ministry of Public Security to direct the Police force; the Ministry of Industry and Trade to direct the Market Surveillance force to strengthen inspections and supervision to prevent and strictly handle cross-border rice smuggling.

In addition, the MoIT continues to request rice exporters to strictly comply with the provisions of Article 12 of Decree No.107/2018/ND-CP on regularly maintaining reserve rice for sale at least 5% of exported volume in the previous six months and commit to immediately supplying the domestic market upon request by the Government.

It has also requested the 20 largest rice export traders sign an agreement with at least one supermarket system to ensure 5% of reserve rice for sale upon request.

If the trader fails to maintain the circulation reserve volume, or fails to fulfill commitments under the agreement, or makes a dishonest declaration, or is reminded but fails to remedy, the Ministry Industry and Trade will revoke the trader’s rice export permission.