Jan 16, 2009

Cassava exports stuck at Chinese border

Viet Nam News 16-01-2009. More than 2,000 tonnes of cassava starch is stuck at Chi Ma Border Gate in northern Lang Son Province after Chinese firms were reported to have called a temporarily halt to their imports without notifying their Vietnamese partners. — VNA/VNS Photo Song Toan
LANG SON — More than 2,000 tonnes of cassava starch transported to the Chi Ma Border Gate in Lang Son Province for export to China two months ago is still stuck at the border.

Export enterprises and the cassava growers are becoming increasingly concerned about the losses they will incur.

In the middle of last November, some 40 lorries carrying 2,160 tonnes of cassava starch from five enterprises arrived at the border and began the long wait for the completion of export procedures. At no time were the managers of these enterprises informed that their Chinese partners had temporarily stopped importing the product.

"I am greatly worried, and so are the other enterprise managers," said Ngo Thi Lien, vice director of An Phu Company in Lang Son Province. Her company now has 800 tonnes of cassava starch stuck at customs.

Chinese partners have remained evasive for the reason of the import halt, according to Tran Xuan Thuong, vice-head of the Chi Ma Customs Branch.

Le Minh Thanh, director of the province’s Department of Industry and Trade, said the reason for the border hold-up might be controls on food hygiene and safety.

China’s Border Gate responded to Vietnamese enterprises that the goods could be imported if they accepted exporting them as ingredients for industrial production, said Thuong.

"The price of cassava starch for industrial production is much lower than for food processing, that is why enterprises do not agree," according to Thuong.

All they can do now is wait, according to Thuong.

Meanwhile, Vietnamese enterprises are bearing the high costs for the storage and parking at the border.

Lien said the price for parking lorries was VND500,000 (US$28.5) per day. For the past two months, the five companies had had to pay about VND200 million ($11,400) for parking fees alone.

"We have to hire labourers to look after the goods, and rains have made the cassava starch mouldy," said Lien.

Enterprises cannot return the goods because they have already finished customs clearance procedures or are in the waiting for them to be finished.

Meanwhile, Nghiem Duc Thuan, vice director of Dak Lak Agricultural Food and Materials Company, said the difficulties the company would be facing were huge, adding that in Tay Ninh, some 20 out of 40 enterprises operating in cassava starch production had closed.

The price of cassava has sharply decreased, making growers hesitant to sell. More than two months ago, the price was VND7,000 per kg, now it is only VND3,000.

Pham Van Phai, from Tran Yen District of Yen Bai Province, who has a 2ha cassava plantation, has left the whole plantation unharvested.

"We are still waiting for the price to come up. If it does not, then I am broke," said Phai.

Last year, he earned VND40 million ($2,200) from selling cassava.

"The situation is unprecedented," said Duong Van Dam, a cassava trader in Yen Bai Province.

Experts’ opinions

A broad look at the situation showed that the crisis was caused by short-sightedness and short-term thinking, said Nguyen Tri Ngoc, head of the Department of Cultivation under the Ministry of Agriculture and Rural Development (MARD).

He said MARD’s plan for cultivation development to 2020 had suggested farmers not to further increase the area of cassava plantations, but to maintain the total area of cassava cultivation at 400,000ha.

Ngoc said that farmers, as well as enterprises, chased short-term profits and grew more cassava than detailed in the general plan.

Currently, the country has more than 420,000ha of cassava.

The major market for exporting cassava starch is China, according to Nghiem Duc Thuan, vice-director of Dak Lak Agricultural Food and Materials Company.

"My company only exports to China, and has no other consumption market. When this market closes, the company will be broke," said Nguyen Thi Kim, director of Quang Phat Company in Lang Son Province.

Le Khac Triet, acting chairman of the Viet Nam Association of Rural Industries Small-and Medium-sized Enterprises (VARISME), proposed the establishment of an association for the cassava industry so that it could act as the representative to protect the rights of enterprises in such cases.

By now, the amount of cassava starch is still at the custom border gate. Enterprises can only wait. — VNS

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