Strict new conditions for rice exporters that take effect on October 1 are set to result in 50 enterprises losing export licences, according to the Ministry of Industry and Trade's Import and Export Department.

Decree 109 on rice export businesses will require enterprises to meet criteria such as having a warehouse with capacity of at least 5,000 tonnes of rice in stock, at lease one rice husking workshop with a minimum capacity of processing 10 tonnes of rice per hour and export volume of at least 10,000 tonnes of rice each year.

The Import and Export Department reported the nation has more than 150 rice exporters currently, with either one-year or five-year export licences.

With 50 out of the 150 rice exporters expected to fail to meet the new criteria, the ministry has asked the Vietnam Food Association (VFA), rice export management teams and provincial authorities to ensure solutions for enterprises that lose export licences.

Truong Thanh Phong, VFA chairman, said the association asked firms not to race to build new storehouses as this may result in unused facilities and be a iste of money.

Rice trading firms do not necessarily have to export rice directly and instead can sell their rice to export firms, Phong said. "That will still ensure a high turnover," he said.

Nguyen Thanh Bien, deputy minister of industry and trade, said balancing supply and demand in rice exports is an important factor in the success of these enterprises.

"So, they should not produce too much rice and build many storehouses only to be left with this stock if they are unable to export it," he said.

The VFA and provinces should review the number of storehouses and rice husking factories that were built since Decree 109 is publicised in January 1, 2011, Bien said.

The ministry asked other ministries and provinces to submit feedback on the new regulations for rice exporters during the next five years, Bien said.

The Ministry of Agriculture and Rural Development reported rice exports fell by both volume and export value, seeing a year-on-year decline of 2 per cent in volume to 4.6 million tonnes and a decline of 8.7 per cent in value to 2.1 billion USD. The average export price also dropped by 6.6 per cent to 458 USD per tonne.

Phong said that despite difficulties, Vietnam is likely to achieve its yearly target of exporting 7 million tonnes of rice if the country focuses on tapping its strength and retains its existing markets.

Additionally, the country should boost its export of high-quality products, Phong said, adding that China has been importing all high-quality and fragrant rice found in the domestic market.

The VFA recommended that Vietnam focus on higher quality rice, as cheap Vietnamese rice is failing to compete with low-priced rice from India and Myanmar.-VNA