Hanoi, April 17 - Vietnam has halted the shipment of 120,000 tonnes of rice, including 43,500 tonnes bound for Africa, citing violations of export rules, in a move the shipper said on Friday could lead to serious delays and further trade disputes.
The Vietnam Food Association said Kien Giang Trade and Tourism Co (KTC) submitted contracts for loading permits after an export restriction took effect on Feb. 21, but the exporter said it signed the deals totalling 130,000 tonnes between Feb. 10-20.
The association halted registration for new export contracts with shipments through June and only allowed deals with shipment from July to September after the contracted volume for the first half reached a record high. [ID:nHAN430938]
"We cannot let corporate benefit affect the national strategy," a food industry official said. "Exporters have signed to sell too much rice while the government needs to balance supply, domestic demand and national food security."
The food association said Vietnamese exporters had signed deals to ship a record 3.6 million to 3.7 million tonnes of rice during the first half of 2009, compared with 2.3 million tonnes loaded in the same period last year.
On Wednesday, it granted a permit for the loading of 10,000 tonnes for a Singaporean buyer bound for East Timor, while KTC sought immediate release of the 43,500 tonnes destined for Africa, according to documents obtained by Reuters on Friday.
The buyer and destination of the remaining volume was not clear.
KTC, based in the Mekong Delta province of Kien Giang, says it was Vietnam's third-largest rice exporter in 2008 by revenues. It said buyers of the 43,500 tonnes had opened letters of credit and dispatched ships for loading.
KTC has now been paying penalties for delayed loading and "the buyer would bring a lawsuit at the international court should the delivery fail", KTC said in a document sent to the food association.
Last month the Agriculture Ministry also said exporters would seek approval from rice buyers to delay some shipments after they contracted 4 million tonnes, loading for most of which is scheduled within the first half of 2009. [ID:nHAN295762]
It is not the first time the food association has issued curbs in the 20-year history of Vietnam's rice exports.
Before Vinafood 2, Vietnam's largest rice exporter, joined rice tenders in the Philippines, the world's largest grain importer, the food association told other Vietnamese exporters to stay away to avoid price competition.
The government has assigned Vinafood 2 to handle rice demand in the Philippines, Malaysia and Indonesia, while only Vinafood 1, the country's second largest rice exporter, is allowed to deal with Iraq and Cuba. Their contracts are government-to-government deals.
Other firms, including KTC, compete for company-to-company contracts, as opposed to government deals. They can join government deals only by contributing their rice to shipments by Vinafood 1 or 2.