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Commerce minister announces rice price policy
The government will not introduce measures to curb increasing rice prices as the cost of the grain in Laos remains lower than in neighbouring countries, according to a top commerce official.
“If we make the price of rice lower than in neighbouring countries Lao farmers will export their crops and that will lead to a shortage here in the future,” Minister of Industry and Commerce Dr Nam Vinhaket told Vientiane Times at a media conference in Vientiane recently.
“We would then have to buy back rice from other countries at a higher price.”
Dr Nam made the comments in response to public concern that the increasing price of rice, the staple food in Laos, is a major contributor to high inflation rates, which are hurting consumers, particularly those on low incomes.
Inflation in January was recorded at 6.5 percent, with rising prices for food and fuel the main driving forces. Economists have urged the sectors concerned to increase efforts to manage the price of rice to keep inflation lower than the government's target GDP growth rate of 8 percent.
Dr Nam said he believes people living near the Thai and Vietnamese borders sell rice to these countries. It is difficult for authorities to stop this practice, as villagers can get better prices.
According to senior officials at the Ministry of Industry and Commerce's Domestic Trade Department, the government has allocated funds for rice mills and state enterprises around the country to stockpile rice so they can release the grain to the market when prices rise to high levels.
The government released some of its stockpiled rice onto the market last year, allowing many people on low incomes to buy cheaper rice at a time when prices were spiralling.
Dr Nam said the ministry considers price management to be an important issue for stable economic growth and social order, adding that if prices rise too much people will face higher living costs.
“It is not only Laos which has a policy to manage the price of rice; other countries around the world do likewise,” he said.
However, he admitted it is impossible for the authorities to keep the prices of all goods in Laos unchanged as it would not be good for traders.
Trade officials said they are urging traders to display the prices of their goods as one measure to help officials monitor prices and allow consumers to make more informed decisions.
At present, most market traders don't display prices and consumers have to bargain a price before making a purchase.
vientiane times
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