Macaria Baira-vice chair of Southern Africa Organisation for International Cooperation and Regional Integration said that Vietnam's rice quality is good with competitive prices so many African businesses want to import Vietnam rice.

Annually, the organisation's members import about 140,000 tonnes of rice. As estimated, half of the volume is imported from Vietnam instead of Thailand and India. African partners want to import rice directly from Vietnam, and not through any intermediary organisation, she added.

According to Jules Touka Tchakonte from Cameroon Chamber of Industry and Commerce, the rice demand of the Economic and Monetary Community of Central Africa (or CEMAC) with 35 million people has doubled during the past four-years with the total import spending of US$180 million a year. In 2009 alone, the market will import about 550,000 tonnes. But, now Vietnam ranks the fifth among top rice importers of African market.

Namadou Samb-representative from the West African Economic and Monetary Union IUEMOA) said that the region has over 80 million people demanding a huge volume of rice, but to date Vietnam's rice only accounts for 14% of the market share, much lower than the figure of Thailand's 36%. According to the statistics reported at the conference, Africa's rice imports were 15-20% on average of total Vietnam's export volume, ranking after Asia and Middle East.

In 2008 particularly, till November 18, Vietnam exported about one million tonnes of rice to Africa, equalling to 25.6% of the total rice export. Especially, Vietnam's rice export turnover to IUEMOA in the first nine months of this year reached US$121 million, up over 137% y-o-y.

As reported, Vietnam Southern Food Corp (Vinafood II) has signed a contract of exporting 100,000 tonnes of 5% broken rice to Malaysia at the price of US$460 per tonne. Under the contract, the largest one in the last two months, the rice will be delivered between now and December with the seller paying the freight (CF).

At the conference, most of the delegates admitted that Vietnamese and African rice export import companies have not had any chance to work together because Vietnam's rice export to the market is mainly through intermediary organisations so Vietnam's rice price is usually pushed up. For example, the average rice price of the region (Africa) has now jumped to US$800 per tonne and the price of the same rice from Vietnam is much lower, Jules Touka Tchakonte said.

Le Thi Thanh Diem, director of Tien Giang province's Viet Phong Ltd Co admitted that although being interested in African market, it is difficult to seek information on the partners so the unit still exports rice via an intermediary stage.

Vietnamese companies stressed that the most difficult problem in exporting rice to Africa is payment. Many customers from Africa propose to buy rice under the method of Cost, Insurance, and Freight (CIF) but we have to reject for the fear of complex payment risk. Even, one customer advanced 30% of contract value without opening Letter of Credit (L/C), we still refused, Diem added.

In order to solve the aforementioned difficulties, governments must have national policy exchange and release bilateral trading agreements. Especially, use commercial tools such as insurance, logistic, legislative issues, quality check to boost rice export import activities between African countries and Vietnam, Namadou Samb proposed.

Tuoi Tre - November 27, 2008