Outbound rice shipments of Vietnamese enterprises have recently slowed due to troubles from the collection of the terminal handling charge (THC), announced by foreign shipping companies early May.
“Rice exporters are facing problems as they do not reach agreement with partners on hiring ships and changing price calculation method, so several contracts have started facing delays,” according to the Vietnam Food Association (Vietfood).
The association reported local companies signed export contracts for 3.3 million tons of rice in the first four months this year, down 19 per cent against the same period last year.
However, only 1.7 million tons have been loaded on ships to date, partly due to difficulties on shipping vessels, which monthly cost domestic enterprises US$2 per ton for long-term rice storage at port.
According to foreign ship owners, besides the transportation fees, Vietnamese companies will have to pay an extra sum of US$65/20-foot container and US$98/40-foot container. The fee will be applied to consignments shipped on European routes from May 2, and on American routes from May 15. The THC levels of US$60/20-foot container and US$90/40-foot container will be applied to consignments shipped to the Middle East and Asia from June 1.
The THC scheme negatively impacts product cost and competitiveness, said an official from the Vietnam Chamber of Commerce and Industry (VCCI).
The official added it may also cause conflicts in interest among involved parties, ship owners, ports, and shipping companies.
Vietnam, the world’s second biggest rice exporter, is expected to ship 4-4.5 million tons of rice abroad this year, around 200,000-700,000 tons lower than 2006.
Traditional buyers of Vietnamese rice are mostly from the South East Asian, Middle East, and African regions. (Vietnam Economic Times)
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