February 19, 2011

 

Vietnam allows re-fumigation of Indian corn and soymeal

 

 

Vietnam has permitted the re-fumigation of Indian corn and soymeal cargoes, which were rejected on quality related issues, sources said on Friday (Feb 18).

 

In the past 12 weeks, more than 150,000 tonnes of Indian corn and soymeal have either been rejected outright or accepted only after re-fumigation in Vietnam.

 

A joint inspection was conducted by Indian and Vietnamese authorities of one of the cargoes at Hai Phong port, following which it was decided that it would have to be re-fumigated, one of the sources said.

 

Another source said other bulk and container shipments at various ports including Ho Chi Minh City, which were also held up for the last few weeks, may also have to be re-fumigated.

 

Earlier, Vietnam was insisting that the cargoes be returned and fresh shipments be sent.

 

After re-fumigation, if no quarantine pests are detected, unloading of the cargoes may be allowed, the sources said.

 

They said the re-fumigation will have to be done at the expense of the Indian exporters. India had sent a two-member team to Vietnam in an effort to resolve the matter.

 

Indian exporters said re-fumigation of at least one cargo has been permitted but  uncertainty remains for future exports which are fraught with risk.

 

If shipments in the future are rejected, it can result in heavy losses to traders.

 

Even Vietnamese importers of Indian corn and soymeal are wary because once a shipment purchased on cost and freight basis sets sail from the port of origin, the payment is released by the buyer. If the cargo is rejected at the destination, recovery of payment can cause a hassle.

 

India is Asia's largest exporter of soymeal and corn while Vietnam is one of its largest customers, and any delay or halt in shipments will force importers to make much-costlier purchases from Argentina and will impact sellers' margins.

 

On Thursday (Feb 17), at a grains conference in Singapore, traders said Vietnam is looking to buy 300,000 tonnes of corn for shipment in March-April, and may purchase some of it from Thailand and Argentina, despite high prices.

 

Indian corn has recently been imported at around US$290 a tonne, cost and freight, while Thai corn is being offered at US$315-US$320 per tonne and Argentine corn is being offered around US$345 per tonne.

 

Vietnamese authorities said that inspection of Indian cargoes has showed the presence of a quarantine pest, tragoderma granarium.

 

The Indian exporters contend that at the request of Vietnamese authorities, they have increased the dosage of pest control fumigation before shipment to an extraordinarily high level, under which it is impossible for pests to survive.