Spoiling rice in Vietnam shows the perils of food protectionism
THE plight that has fallen Duong Vu Co, one of Vietnam's biggest rice exporter, illustrates the perils of food protectionism, reports Bloomberg News
THE plight that has fallen Duong Vu Co, one of Vietnam's biggest rice exporter, illustrates the perils of food protectionism, reports Bloomberg News.
While the world's third-biggest rice exporter - Vietnam - has since reopened some trade, hundreds of thousands of tonnes of spoiling rice at the country's ports show the dangers of curbing exports as the Hanoi government has done.
'My company is teetering on the edge of collapse,' said Duong Vu's CEO Quang Hoa. 'We may have to throw away all the sticky rice, and spend more money getting rid of it.'
He's laid off 400 factory workers, but his losses keep growing. If he doesn't ship the 12,500 tonnes of rice soon, he's worried his Chinese clients will reject it, and his company will be forced to default on US$13 million in bank loans.
Mr Hoa is one of more than 100 traders in Vietnam hurt by a government measure last month to restrict shipments on concerns that global demand will spike as the coronavirus upends supply chains.
Less than three weeks after suspending overseas shipments on March 24, Hanoi said it would allow 400,000 tonnes of exports in April. To do so, traders had to submit customs declarations, with registration opening at midnight on Saturday April 11.
Within three hours, the export quota was full, according to local news. Many were unable to register, and an estimated 300,000 tonnes are still stuck at ports, according to Pham Thai Binh, chief executive at exporter Trung An High-Tech Agriculture., who sits on the Vietnam Food Association's governing board.