Vietnam is to tighten rice export procedures from next year, requiring exporters to have sufficient storage capacity and milling facilities, at a time when firms with some foreign ownership will be allowed to enter the sector. From January 1, 2011, rice exporters must have at least one warehouse capable of storing 5,000 tonnes of paddy and one milling facility to process 10 tonnes of paddy per hour, Prime Minister Nguyen Tan Dung said in a decree.
At the moment, rice exporters are not bound by any conditions related to storing or milling capacity, although they have to respect minimum export prices set by the Vietnam Food Association. Industry officials say the decree could reduce the number of qualified rice exporters, which would help avoid excess capacity next year, when Vietnam will allow companies with some foreign investment to process and export rice.
Vietnam, the world's second-largest rice exporter after Thailand, is forecast to ship at least 6 million tonnes in 2011, after a record 6.5 million tonnes expected for 2010, according to a recent state media report. More than 200 Vietnamese companies now compete to export rice, but only 57 of them can be described as active, shipping at least 10,000 tonnes a year or more. Some 82 firms sell less than 1,000 tonnes each a year, the Vietnam Food Association has said.