Vietnamese rice exporters face risks in US market
VietNamNet Bridge – Vietnam rice exporters face a risk of being sued because of their low selling prices in the US market.
Local newspapers have quoted Lawyer Ngo Quang Thuy as reporting that the US House of Representatives’ Finance & Tax Committee, unofficially representing USRPA (the US Rice Producers’ Association), on May 15 filed a petition to the International Trade Commission (ITC) requesting an investigation of the competitiveness of rice imports against domestic rice.
On June 17, the commission released a decision to begin an investigation. It is preparing a report on the risks for US domestic rice production from major rice exporters in the world, including Brazil, China, India, Indonesia, Thailand, Uruguay and Vietnam.
After the investigation ends, the US may consider imposing an anti-dumping and countervailing duty lawsuit, slated for 2015.
Thuy said he can see some worrying problems when considering the rice import prices from Vietnam in the period from 2009 to 2013.
ITC documents show that the average import price from Vietnam in 2013 was about half of the import prices from Thailand, India and Pakistan, the three biggest rice exporters to the US in the year.
Nguyen Van Don, director of Viet Hung Company Ltd, said he is concerned that the US may file a lawsuit against Vietnam rice imports.
According to Don, Vietnam mostly exports fragrant rice, a high quality rice, to the US, but the price of exports is only half of the Thai rice price.
Professor Vo Tong Xuan, the best-known rice expert in Vietnam, noted that Vietnamese rice exporters should pay more attention to conquer the US market.
In 2013, Vietnam was the third biggest rice exporter in the US, following Thailand and India. Xuan stressed that this is a market with high potential because of a high percentage of Asians live in the US.
The attractiveness of the US market has prompted Cambodia to invest millions of dollars on a program to upgrade its rice export quality to boost exports to the US.
Analysts commented that by selling rice cheaply, Vietnam not only loses big money, but also faces high risks of being sued in the US market.
Most recently, Vietnam won a bid to provide 800,000 tons of rice to the Philippines. And the reason behind the “victory” was the low bidding price Vietnam offered.
The average price Vietnam offered was $439 per ton CIF (cost, insurance, freight in the Philippines), which was $30 per ton lower than the prices offered by its rivals. Cambodia, for example, offered the price of $469 per ton, and Thailand offered $474 per ton.
Xuan noted that Vietnamese enterprises should not try to sell rice cheaply to attract more buyers. In fact, this policy has done more harm than good.