Rice supply chain in Mekong Delta may be broken
Rice supply chain in Mekong Delta may be broken
Rice traders’ inactivity, perfunctory function of processing plants and businesses’ reluctance to export the grain threaten to break the supply chain in the Mekong Delta, Vietnam’s rice bowl.
Farmers harvest summer-autumn rice in Thoi Lai District, Can Tho City. Photo by VnExpress/Cuu Long.
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Tran Van Nam of Thoi Lai District, Can Tho City, said he has harvested some 20 tons of high-quality rice from his three hectares. Two months ago a rice trader had deposited VND9 million to buy his rice at VND6,000 per kilogram, he said.
"One week ago I harvested the rice, and the trader said if I did not lower the price to VND5,300, he would no longer to buy and was willing to forfeit the deposit. After one day of consideration, I decided to reduce the price. Now the price has decreased to VND5,100."
According to Nam, many traders have decided not to buy from farmers in the district, instead opting to lose their deposits.
Many traders admitted this is true.
Rice trader Nguyen Van Kien in Phong Dien District, Can Tho said: "In previous summer-autumn rice crops, I bought 50,000-60,000 tons of the grain from farmers in the provinces of Hau Giang, An Giang, Bac Lieu and Kien Giang, but this crop, I bought only 5,000 tons."
Rice transport and distribution have stalled due to social distancing, he added.
His 100-odd employees with nearly 30 combine harvesters and 20 boats and barges used to buy and transport rice, but not now. To go to work they have to get Covid-negative certificates valid for just days and operate in just one district, which are unsuitable for the nature of their work.
Normally, they go from field to field and province to province to harvest rice from 7-14 weeks, he explained.
"Procedures related to Covid testing is time consuming and costly, and so most rice buyers have ceased operations while some others have sharply reduced operations."
Workers transport paddy in Thoi Lai District, Can Tho City. Photo by VnExpress/Cuu Long.
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Nguyen Tuan, owner of a rice milling and polishing plant in Thoi Lai District, said he used to process 6,000 tons of paddy a month, but now the volume is below 500 tons.
Rice buyers, processors and exporters have difficulty in transporting the grain.
The Vietnam Food Association said that it has 120 corporate members, and amid the social distancing half have temporarily shut down their rice milling and polishing plants, and the rest have halved their capacity.
HCMC’s major container port Tan Cang Sai Gon has stopped accepting rice consignments for export since July, and the Cat Lai Terminal has been hit by a pile-up of containers.
"Since many southern cities and province have social distancing, rice supply chains for domestic consumption and exports have been seriously affected," a top official Vietnam Food Association said, adding that the uncertainty surrounding Covid has made many reluctant to sign export contracts.
The association has urged its members to strengthen purchases of paddy from farmers and wants the Ministry of Industry and Trade to create more favorable conditions for traders to buy at the field and transport fresh paddy to processing plants to safeguard quality.
It wants authorities to prioritize creation of ‘green lanes’ for rapid checks at checkpoints for vehicles transporting freshly harvested paddy to drying plants, rice from milling plants to ports for export and to localities that have high demand for the grain.
It also wants the State Bank of Vietnam, the central bank, to instruct banks to provide more unsecured loans to exporters so that they could buy more summer-autumn paddy, reduce interest rates and extend loan terms.
It has called on relevant agencies to prioritize Covid vaccination for vehicle drivers and personnel directly involved in rice processing and exports.
According to the Ministry of Agriculture and Rural Development, in the Mekong Delta, where 1.5 million hectares were planted with summer-autumn rice, over 700,000 hectares have been harvested, and the task would be completed by late August or early September with the paddy output topping eight million tons.
Prices have been falling since last month, and a kilogram of fragrant rice now sells for just VND5,500-5,600 (US 24 cents), down VND500-600. High-quality rice is down VND800 to VND5,200.
