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A meeting between enterprises and banks from Vietnam, Laos, Cambodia and a number of African countries will take place in Hanoi next month with an aim to remove payment problems between Vietnamese rice exporters and African partners.

The meeting will be held by the Ministry of Industry and Trade and the Vietnam Chamber of Commerce and Industry in coordination with the International Organization of the Francophonie (OIF) and the International Trade Center (ITC).

According to the South West Asia and Africa Market Department under the trade ministry, many enterprises have encountered difficulties in payments for rice export contracts signed with partners from the African market.

Because of their limited financial capability, African importers often ask for deferred payments over 30-90 days, CIF mode and no letter of credit. Additionally, businesses from Vietnam and African countries lack the necessary information on each other.

Therefore, to avoid financial risks, Vietnamese firms often export via international intermediary companies. This has pushed up export prices and affected the competitiveness of Vietnamese rice.

Vietnamese rice faces tough competition from cheap Indian rice in the African market.

A source from the Africa Market Department told the Daily that the upcoming meeting between lenders and Vietnamese rice exporters would discuss ways to resolve the payment problems.

Earlier, the trade ministry wrote to African countries with a demand for Vietnamese rice, suggesting signing an agreement on rice trade in a bid to boost rice exports to Africa.

The ministry has signed a memorandum of understanding on rice supply for Sierra Leone and is in talks with other nations over similar agreements.

In the first nine months of 2012, Vietnam exported rice to 29 African nations, down two year-on-year, bringing in a turnover of US$680.14 million – a 5% fall. The top ten buyers of Vietnamese rice from Africa are Ivory Coast, Ghana, Senegal, Angola, Cameroon, Algeria, Kenya, Mozambique, Tanzania and Guinea.

(Sai Gon Times)

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