VietNamNet Bridge - Though Vietnam offered the lowest bidding price among three tenders, it was not chosen as the supplier by the Filipino National Food Authority (NFA).

Thoi Bao Kinh Te Sai Gon quoted the director of a rice export company as saying that all three exporters lost the bid to provide 100,000 tons of 25 percent broken rice to the Philippines.

The three exporters attending the bid on June 16 included Vietnam, Thailand and Cambodia. The problem was that they all offered prices higher than the price level fixed by NFA at $408.14 per ton.

Vietnam offered $417 per ton, and Thailand and Cambodia $418 and $464 per ton, respectively.

At previous bids, if NFA did not choose suppliers after the first bid, it allowed bidders to lower the bid. However, the principle was not applied this time.

An analyst said that Vietnam fails with its low-price strategy. 

He said the Philippines recently tried to force the prices down because it anticipated that Vietnamese exporters, once losing the bids, would lower prices to obtain the right to supply rice.

As a result, farmers have to sell rice to exporters at prices which cannot bring profits.

“Vietnamese farmers cannot make reasonable profits though they have been working hard on rice fields,” the analyst said.

Professor Vo Tong Xuan repeatedly warned that the monopoly enjoyed by Vinafood 1 (the Northern Food Corporation) and Vinafood 2 (Southern Food Corporation) is the biggest hurdle that prevents private businesses to join the rice market. 

Taking full advantage of the monopoly, the two corporations can control the rice prices at which they collect rice from farmers.

Former late Deputy PM Nguyen Cong Tan also noted that Vinafood 1 and Vinafood 2 are the exclusive buyers, while the Vietnam Food Association enjoyed the right to grant quotas for export.

Farmers thus do not have opportunities to contact other enterprises and partners to sell rice at better prices.

In related news, Nguyen Ngoc De from the Can Tho University warned that Myanmar has emerged as a strong rival to Vietnam in rice exports.

The country wants to become one of the three largest rice exporters in the world in the near future.

It not only exports low-cost rice, but also high-quality fragrant rice which mostly targets the EU market. 

According to the Myanmar Rice Federation, the country plans to export 200,000 tons of rice to the EU this year, double the export volume to the market last year.

Dat Viet