MOIT's concern in rice exporters 'underbidding' with low prices

After Vietnam Agriculture News raised concerns about "the worry when Vietnamese enterprises offer the lowest rice export prices in the world," the Agency of Foreign Trade (Ministry of Industry and Trade) urgently sent a document to the Vietnam Food Association (VFA), expressing concerns and requesting the VFA to verify the related information.

Specifically, the Agency of Foreign Trade stated that according to the information, during the tender on May 21 by Indonesia to import 300,000 tons of 5% broken white rice, some Vietnamese rice exporters participated and won the bid with prices lower than the export prices of Vietnamese rice in the global market.

The department noted that exporting rice at low prices could potentially violate competition laws.

Meanwhile, Indonesia is a traditional and key rice export market for Vietnam, so it is necessary to take measures to protect the market and ensure effective exports.

To maintain the reputation and brand of Vietnamese rice in the global market, as well as uphold Vietnam's position in the Indonesian market, the Agency of Foreign Trade requested that the VFA organize meetings with its members who won bids in the Indonesian market and report in detail to the Ministry of Industry and Trade on the export activities and bidding situation of these enterprises.

Additionally, the Agency of Foreign Trade urged the VFA to verify the information that the media had reported recently about some companies "bidding at low prices."

Moreover, the department called for disseminating information and educating members to thoroughly understand and strictly comply with the laws on rice export business, competition, and trade defence.

Furthermore, the department requested the VFA to enhance monitoring of its members' export activities to promptly report and propose handling measures to the Ministry of Industry and Trade and other relevant authorities; a report should be submitted to the Agency of Foreign Trade by May 31.

What do companies "bidding at low prices" say?

In a related development, in a press release on May 30, Loc Troi Group Joint Stock Company stated that the export rice price for the shipment to Indonesia had been carefully calculated, ensuring profitability and balancing the interests of farmers.

Specifically, Loc Troi stated that on May 22, the Indonesian National Logistics Agency (Bulog) announced that Loc Troi and Dai Tai (a member of Loc Troi's agricultural ecosystem) won a bid for 100,000 tons of rice out of a total of 300,000 tons in this tender.

There were two bid packages, with Loc Troi winning the package of 60,000 tons, and the package of 40,000 tons was the first winning bid for Dai Tai High-Tech Agriculture Joint Stock Company, a member of Loc Nhan Food Joint Stock Company, an affiliate, and a member of Loc Troi's agricultural ecosystem since late 2022.

The entire order is expected to be delivered within two months, with payment made through a letter of credit (LC), and Loc Troi and Dai Tai will collect over $ 55 million (equivalent to over VND 1,300 billion).

Loc Troi also reported working with domestic and international banks to fund the plan to maximize rice purchases for farmers, utilizing existing production capacity from 10 rice processing plants with a drying capacity of 10,000 tons per day to complete this order.

According to this company, when signing orders, each price level is calculated very carefully to cover costs, ensuring profitability for the group while balancing the interests of farmers, market benefits, and the long-term benefits of Vietnamese agricultural products.

As such, the price of the 100,000-ton order this time was calculated by the company to meet these requirements. This price reflects the current rice market situation, meets the quality standards as required, and considers the timing.

Furthermore, it does not affect future tenders or the export price of the 6-8 million tons of rice that Vietnam exports annually to the global market.

Loc Troi Group JSC recently issued a press release regarding winning a bid to supply 100,000 tons of rice to the Indonesian State Logistics Agency (Perum Bulog), with continuous delivery over the next two months, expected to bring in over $ 55 million.

There are two bid packages, with Loc Troi winning the 60,000-ton package, and the remaining 40,000 tons is the first successful bid for Dai Tai High-Tech Agriculture JSC, a member of Loc Nhan Food JSC, which has been part of Loc Troi’s agricultural ecosystem since late 2022.