State Bank steps in on rice buy-up

The State Bank of Vietnam (SBV) on Oct. 13 instructed commercial banks to provide loans to the Southern Food Corporation in a move to aid the corporation in buying 500,000 tonnes of rice harvested from the 2009 summer-autumn crop for stockpile.

Under Official Letter 8042/NHNN-TD, the corporation will receive the interest-free loan, with the SBV paying all the interest rates. The loan will enjoy the lowest lending interest rates currently being applied by commercial banks.

The lending and disbursement will last until November 20 this year while the deadline for enjoying the interest-free loans is January 20 next year.

The move was made in the wake of a Prime Ministerial instruction last month that required the Southern Food Corporation to buy rice for stock-pilling to stabilise the domestic rice price.

The company will buy rice at prices which will allow local growers to make profits of at least 30 percent.

Earlier, the Vietnam Food Association also asked its members to buy 500,000 tonnes of rice in September at 3,800 VND (21 US cent) per kilogramme to stabilise prices.

Once the Southern Food Corporation’s purchase is completed, the country will raise its total summer-autumn rice stockpile to nearly 1.5 million tonnes of rice.

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