Hanoi, Aug 6 - Vietnam will stop firms exporting rice to certain destinations when such sales would be in competition with government contracts handled by the top two state-controlled exporters, according to rules issued by an industry body.
From Aug. 10, exporters will not be allowed to sell rice to foreign companies that have signed government-backed deals, or to foreign traders who compete in the markets where Vietnam aims to sign such contracts, the Vietnam Food Association has ruled.
The regulations were issued on July 30 and obtained by Reuters on Thursday. Vinafood 2, the country's top rice exporter, started talks on selling up to 500,000 tonnes of rice to the Philippines in late July.
Rice is Vietnam's top cash earner among its agricultural exports. It is the world's second-largest rice exporter.
The government assigns Ho Chi Minh City-based Vinafood 2 to handle rice demand from the Philippines, Malaysia and Indonesia, while Vinafood 1, based in Hanoi, deals with Iraq and Cuba. Their contracts are government-to-government deals.
Other exporters compete for company-to-company contracts and can join government deals only by contributing their rice to shipments by Vinafood 1 or 2.
The food association has from time to time banned domestic firms from selling rice to foreign firms in markets where Vinafood 1 or 2 bids in major tenders, but it had not set any formal legal framework until July 30.
The association sets a price floor for the export of ordinary rice and grants loading permits after it has checked contracts to ensure proper pricing, destinations and payment terms.
Vietnam allows free export of glutinous and fragrant rice, which make up a tiny part of overall grain exports.
Under the new rules, serious violators could have their export licence revoked by the Industry and Trade Ministry, the association said.
More than 160 rice exporters, all Vietnamese, shipped a combined 4.65 million tonnes of rice last year. Vinafood 1 and 2 accounted for the bulk of that.
In a separate development, an information centre run by the Agriculture Ministry said foreign-owned companies could be allowed to export rice from this year rather than 2011, the date set under Vietnam's World Trade Organisation commitments. It did not specify a date.
Earlier on Thursday Vietnam raised its expected rice export volume this year by 17 percent to a record 7 million tonnes in a move to shore up revenue due to falling prices.