Rice export floor prices ignored by firms
Rice export floor prices ignored by firms
Although the Vietnam Food Association (VFA) has repeatedly regulated floor prices for export rice to prevent a price slide and protect the domestic market, this policy is ignored by many food traders
Some exporters are still offering rice prices lower than the minimum rate set by VFA but managing agencies fail to take any sanctions against them, so they continue to do it.
VFA has fixed minimum prices for rice meant for exports in a bid to prevent a price decline that usually occurs as the harvest of the new crop begins.
With challenges foreseen this year, VFA in December fixed a floor price of US$370 a ton for exports of 35% broken rice. Rice exporters can still decide on export prices for higher grade rice varieties but they must be higher than the floor price of US$370.
Many enterprises this year have continuously cut export prices. In the last fortnight, the higher-grade 25% broken rice has been offered at just US$345-360 per ton.
VFA during a meeting in HCMC last Friday decided to raise the floor price for exports of 5% broken rice to US$410 per ton starting from February 1. However, enterprises actually are offering this rice variety at only US$385-395 a ton.
An agricultural expert in the Mekong Delta said the loose management and the lack of sanctions are the main reasons for this problem.
According to VFA, local enterprises signed contracts to export over 1.2 million tons of rice last month, surging by 184% year-on-year.
Many enterprises said that Vietnam won large export contracts thanks to competitive prices. Specifically, Vietnam’s rice export prices dropped by US$20-30 against December and are lower than those of India and Pakistan now.
However, with enterprises lowering export prices, it has hit farmers in the Mekong Delta hard. Nguyen Van Hoang, a farmer in Chau Thanh District, Tra Vinh Province, has bemoaned low consumption now while winter-spring unhusked rice sold well last year.
Tran Van De, another farmer in the province, said that he obtained only VND7 million to VND10 million in profit for each hectare of paddy in this year’s winter-spring crop. Only households that have harvested rice early can gain higher profits, De said.
Traders in Dong Thap and Tien Giang provinces are buying unprocessed rice of the strain IR 50404 grains at VND4,150-4,250 per kilo and VND5,100-5,250 per kilo for dry rice.
Material rice of the IR 50404 variety is VND6,600-6,650 per kilo while material rice of long grain varieties such as OM 4218, OM 5451 and OM 1490 are from VND7,100-7,200 a kilo.
vietnamnet
