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Move to stabilise rice prices
Paddy (Unhusked) rice prices are dropping sharply in the domestic market and Government intervention is needed to restore stability, a senior expert says.
The head of the Mekong Rice Research Institute, Dr. Le Van Banh, said paddy prices in local markets had dropped recently from VND6,200-VND6,400 to VND5,500 per kilogramme.
He attributed the slump to a bumper harvest from the Cuu Long (Mekong) Delta's winter-spring crop that would end early April.
With a total cultivation area of 1.54 million ha and an average yield of 6.6 tonnes per ha, Delta farmers are expected to reap over 10 million tonnes of paddy or 6.5 million tonnes of rice from this crop.
Banh said 4 million tonnes of paddy would be used for food, for animal feed and as rice seeds, and the remaining 6 million tonnes (3 to 4 million tonnes of rice) would be sold in the market.
"Such a big supply could exert a lot of pressure on paddy/rice prices," he said.
Last Friday, traders in An Giang and Kien Giang provinces bought dried paddy for VND5,500 – VND5,600 per kilo while husked rice that would be further processed for 25 per cent and 15 per cent broken rice was being sold for VND7,400 and VND7,600 per kilo respectively.
Meanwhile, large volumes of paddy harvested from the winter-spring crop in Cambodia were also being brought into the local market through the long border that Delta provinces share with the neighboring country, further increasing the pressure on paddy prices.
With such a large supply volumes, the Government should increase the quantity of paddy/rice to be bought for reserves, Banh said.
The volume of rice for reserves should be doubled to 4 million tonnes of paddy or 2 million tonnes of rice, accounting for 60 per cent of the commercial rice from the winter-spring crop, he added.
The Viet Nam Food Association (VFA) said its members had bought 2 million tonnes of paddy since the beginning of the month.
However, the high interest rates on bank loans were hindering their plans to buy more to maintain reserves, it added.
If the Government were to subsidise part of interest rates, VFA members could boost rice purchases for reserves and thus boost consumption in the local market, Banh said.
He noted that production costs were rising sharply because the prices of all materials were on the rise. The production costs for this year's winter-spring crop was 30 per cent higher than the same crop last year, he said.
He said that to ensure sustainable production, farmers and businesses, including rice mills and exporters, should sign consumption contracts ahead of each crop.
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