Origin fraud may erode Vietnamese rice’s prestige: insiders

High prices of rice sold in the domestic market and for export in the recent past have fueled risks of origin fraud, influencing the prestige of Vietnamese rice in the global market, insiders have warned.

Export prices of Vietnamese rice have stayed high so far this year, helping the five-month export turnover fall down by only five percent despite an 11.3-percent drop in volume.

By mid-June, businesses imported 304,000 tonnes of rice from India via ports in Ho Chi Minh City. The volume included over 112,000 tonnes of 100-percent broken rice, 54,000 tonnes of unhusked rice and 12,000 tonnes of husked rice for animal feed production, and 126,000 tonnes of five-percent broken rice, according to the municipal Department of Customs.

The large import of the five-percent and completely broken rice from India is attributed to the fact that their prices only stand at some 400 USD and 280 USD per tonne, about 100 USD per tonne lower than prices of the Vietnamese counterparts.

Besides, under the ASEAN - India Trade in Goods Agreement, five-percent and 100 percent broken rice from India is entitled to an import tariff of zero percent. Given this, Indian rice imported into Vietnam boasts much more competitive prices than Vietnamese rice.

Notably, the surge in rice import from India has been accompanied by an increase in origin fraud.

The HCM City Department of Customs said it has detected several signs of fraud and violation by rice exporters and importers.

Phan Van Co, Marketing Director of the VRICE Co. Ltd, noted many enterprises have imported white rice from India to polish, mix it with the white rice of Vietnam, and then export the grain to foreign markets under the name of Vietnamese rice, which has seriously affected the prestige and brand of rice from the country.

As a consequence, some partners have suspended buying rice from Vietnam, he noted.

Some companies have also imported the grain from India and sold it as Vietnamese rice at higher prices in the domestic market, Co went on.

Pham Thai Binh, General Director of the Trung An Hi-Tech Farming JSC, attributed the high prices of and customers’ preference for Vietnamese rice in foreign markets to efforts by the whole system, from farmers to processing and exporting companies, and economic diplomacy by the Government, ministries, and sectors.

Therefore, only one batch of goods with origin fraud can have severe impact on the prestige and brand of its entire export sector, he noted, pointing out that due to importers’ suspicion over the origin of Vietnamese rice, export prices have declined fast recently, from 520 - 530 USD per tonne in the last winter - spring crop to 470 - 480 USD at present, while the number of export orders has also been decreasing.

If this problem lingers, domestic rice prices will continue the downward trend, causing losses to farmers, honest exporters, and the entire rice industry of Vietnam, Binh added.

Co recommended authorities adopt mechanisms for monitoring imported rice, strictly dealing with violators, and publicising the names of businesses committing fraud.

The HCM City Department of Customs said the customs force has stepped up collecting and analysing information about rice importers and exporters so as to detect fraud in a timely manner. It has also proposed the General Department of Vietnam Customs to ask the Ministry of Industry and Trade for more details about export rice of Vietnam and fraud warnings, and for additional regulations on rice export./.

Source: Vietnam News Agency