Price falls hit rice farmers despite stockpiling scheme

Price falls hit rice farmers despite stockpiling scheme

Farmers bemoan they have not benefited from the nation’s one-million-ton rice stockpiling scheme for the winter-spring crop in 2013-2014 as prices are still edging down even though the scheme still has more than one week to go.

Many enterprises in the Mekong Delta have stocked up on almost enough rice volumes under the program. For example, 15 enterprises in An Giang Province had bought a combined 116,000 tons by last week, meeting some 80% of the total allocated by the Vietnam Food Association (VFA), and many of them had completed their purchases, according to the provincial Department of Industry and Trade.

As observed by the Daily, the assigned firms have bought large amounts but rice prices in this province have remained volatile.

Before the scheme began on March 15, fresh IR50404 paddy was about VND4,400-4,500 a kilo while unprocessed rice of the same type was VND6,900-7,100 per kilo.

However, around ten days after the launch of the rice buying program, the respective prices of IR50404 paddy and unprocessed rice fell to VND4,100-4,200 and VND6,400-6,500 a kilo.

Although the program has less than 10 days to go, rice prices have inched up slightly but are still low, at VND4,200-4,300 a kilo for fresh IR50404 paddy and VND6,550-6,650 for unprocessed rice of this variety.

The same situation has also happened to other Mekong Delta provinces such as Dong Thap, Vinh Long and Tien Giang where rice prices are on the fall although the VFA members have already or almost completed their assigned purchases.

As calculated by farmers in the Mekong Delta, with the difference of roughly VND300 per kilo between prices before and after the program was launched, they rack up a loss of nearly VND3 million per hectare. Fresh IR50404 paddy brings an average yield of 10 tons per hectare.

To support the rice storage program this time, the central bank has asked a number of commercial banks to offer a credit package of nearly VND8 trillion to participating firms at an annual lending rate of 7%.

Those taking out bank loans to stock up on rice can get loan interest support. The Government has spent much to support participants in the scheme while its efficiency remains questionable as pointed out by experts.

The VFA estimated 800,000 tons of rice had been bought under the scheme for the 2013-2014 winter-spring crop, roughly 80% of the target of one million tons.

Rice exports to China forecast to get bustling

Despite certain difficulties in rice shipments to China since early this year, local experts and companies expect rice trading with the northern neighbor could get busier later this year, partly buoyed by a contract to export 800,000 tons of rice to the Philippines.

According to the VFA, its member companies in the year to date have exported a total of more than 1.3 million tons of rice, with the volume bound for China making up some 40% but slumping 20% over the same period in 2013.

Expert Nguyen Dinh Bich said local companies had rushed to lower selling prices given abundant supplies, leading Chinese buyers to delay imports in anticipation of lower prices. Vietnam’s winning a tender earlier this month to export 800,000 tons of rice to the Philippines will result in a significant drop in local supplies, prompting China to increase rice imports from Vietnam, he noted.

Sharing the same view, Lam Anh Tuan, director of Thinh Phat Company which is a VFA member, projected Vietnam’s rice exports to China to rise soon.

Last year, Vietnam’s rice shipments to China through official and unofficial channels amounted to over three million tons, VFA reports. Meanwhile, the offered export prices of rice have remained stable in recent days, with 5% broken rice at US$380-390 a ton, 25% broken rice at US$350-360 and jasmine rice at US$490-500.

vietnamnet