Xieng Khuang rice price will stay steady despite Beerlao deal
Xieng Khuang rice price will stay steady despite Beerlao deal
The price of rice in Xieng Khuang province will not surge above its current price this year despite one of the country's biggest processing industries planning to buy hundreds of tonnes of grain from the province to produce beer, a senior provincial trade official confirmed on Wednesday.
The Lao Brewery Company signed a contract in the middle of last month committing to purchase around 800 tonnes of milled Khao Kai Noy rice from the province and its neighbour, Huaphan province, to produce Beerlao.
Located in the north of the country, Xieng Khuang is a mountainous province with limited rice fields.
However it does have a strong food production industry that supplies the rest of the country with a number of goods, including rice and meat.
Director of the provincial Industry and Commerce Department, Dr Khampao told Vientiane Times the current price for the best grade of rice sold in the provincial market was 8,000 kip per kilogram.
Over the past two years, the price of rice has been between 6,000-8,000 kip per kilogram depending on its grade.
It is estimated that the price of rice will not climb higher than that this year, despite the deal with the brewery company.
There have been concerns that the massive purchase will impact the price in the market and the amount of rice left over for export but Dr Khampao said there would be no impact because farmers would be able to supply enough to meet demand.
The processing industry buying crops and turning them into other products will boost the province's agricultural production because the market will expand and farmers will make higher profits, he said.
The province produces about 120,000 tonnes of rice every year, which is enough for local consumption, supplying the processing industry and export.
The province exports, on average, 5,000 tonnes of sticky rice to Vietnam each year. Xieng Khuang shares a border with Vietnam.
Dr Khampao said the province currently has 2,000 tonnes of rice in its stockpile, including 400 tonnes of surplus left over from last year. If the price of rice fluctuates, the state enterprise will release this rice into the market to manage the price.
He said the province wanted to sell all 400 tonnes of the surplus stock. Some has already been sold to Vietnamese buyers.
Rice is the main source of food for Lao people. The price of rice will begin rising as wet season crops are planted in June and continue until those crops are harvested in September.
During this time farmers will keep rice they produce for their own consumption.
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