HANOI: Chinese businesses that import Vietnam’s rice across the border can make fat profits. If they import rice through official channels, they would have to pay $70-80 per ton more in taxes and fees. Many trade agreements have been signed with a selling price at VND7,500-7,600 per kilo for five percent broken rice, while the domestic price is lower, at VND7,400 per kilo.
“The higher price offered by Chinese businesses makes Vietnamese businesses happy. However, they should be skeptical when doing business with the Chinese,” Long said.
Therefore, they would rather import rice across the border as they are exempted from taxes and fees. Though they have to buy at higher prices, they still make high profits.
And even if they accept to pay an additional $20-30 per ton, they still can save $40-50 for every ton of rice they buy.
“By raising the rice buying prices, Chinese importers harm Vietnamese businesses which specialize in exporting rice through official channels,” an observer noted.
“Once Chinese businessmen pay high prices for rice, they will push the market average price up,” he explained. “If so, Vietnamese enterprises exporting rice through official channels will have to raise their export prices, thus making Vietnam’s rice less competitive.”
“If Vietnamese enterprises cannot find buyers, they would have to sell rice to Chinese businesses to clear stocks,” he said. Long said there were latent risks in exporting rice through unofficial channels.
The lack of transparency gives Chinese businesses the opportunities to lower prices by using various ploys.
Long said that such ploys had been used many times by Chinese businesses to push the prices down, thus making Vietnamese exporters and farmers suffer.
