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The government of China has granted rice import quotas to businesses, providing an impetus to the exports market especially cross-border exports
According to the Vietnam Food Association (VFA), the country exported 6.3mn tonnes of rice in 2014 worth US$3bn, of which 30 per cent alone was sent to China through official channels and two tonnes of rice crossed the border to reach China through unauthorised channels.
Sources from export companies in Vietnam have observed that China preferred importing rice from the Southeast Asian nation but through unofficial channels as they are cheaper. If rice is imported through official channels, traders would have to pay a quota fee of US$80 per tonne, VAT as well as import tax, all of which would cost US$160 per tonne, added the sources.
The cross-border import/export activities are unlikely to stop anytime soon, felt traders in Vietnam, which is why amending regulations pertaining to cross-border trade would be better than altogether ceasing it.
Vo Tong Xuan, leading rice expert in Vietnam, said, “Vietnamese exporters must not negotiate with Chinese importers through intermediaries, but directly with importers.”
In the light of negotiations failing, Xuan added that Vietnamese businesses would require support from other Vietnamese businesses and the VFA, which is responsible for protecting Vietnamese businesses.