Striving to avoid fluctuation in rice market

Relevant agencies, including the Ministry of Industry and Trade, the Ministry of Agriculture and Rural Development (MARD), the Ministry of Finance and the Vietnam Food Association (VFA), must do their utmost to prevent fluctuations in the rice market.

Bumper year for exports

Despite unfavourable weather, the volume of this year’s rice production has reached the set target of 39 million tonnes. The Cuu Long Delta region yielded more than 21 million tonnes, up around 400,000 tonnes compared to the previous year. The increase will help compensate for the decrease in the north due to natural disasters. Under these circumstances, the Government has applied a flexible management policy to boost exports and has not allocated a fix quota for any business in order to maximize benefits for both farmers and businesses.

VFA chairman Truong Thanh Phong says because of the changeable weather, many countries in the world are now importing more rice. Businesses have promoted transactions with new markets in addition to maintaining traditional ones.

There’s always a great demand for Vietnamese rice in the world, especially from traditional markets, such as Malaysia, Indonesia and Cuba. After several years of interruption, Vietnamese rice is now exported to Bangladesh again. Fragrant rice and five-percent broken rice have secured a firm foothold in Africa, which is the biggest consumer of Vietnamese commercial rice,” Phong says.

As of September 15, Vietnam has exported more than 5 million tonnes of rice, earning more than US$2 billion, up nearly 6 percent in volume and more than 10 percent in value over the same period last year.

At present, the price of Vietnamese rice is the same as Thai rice. Since August, it has risen sharply and the managing group had to adjust the ceiling export price four times to reduce the number of export contracts signed to match the country’s ability to supply rice.

Effort to stabilise the market

In late 2010 and early 2011, deputy Minister of Industry and Trade, Nguyen Thanh Bien, says food supply and demand in the world has inherent risks. However, wide fluctuations like in 2008 are not likely to occur.

The Government is currently focused on three targets: ensuring prices to benefit farmers, creating favourable conditions for businesses to purchase rice and preventing fluctuations in the food supply and demand.

In the initial period, the Government will maintain prices to ensure the highest profit for farmers and encourage them to expand their rice growing areas. It will authorise VFA to direct its member businesses to sell rice at 10 percent lower than the market price. The VFA must keep enough rice in stock to stabilise the market when necessary.

According to MARD, from now to the end of this year the country will produce an additional 1.2-1.4 million tonnes of rice. Around 500,000 ha of autumn-winter crops and 250,000 ha of winter crops will be harvested from mid-September to December. During that time, businesses will be able to purchase and stockpile more than 900 tonnes of rice.

Ministries, departments, localities, the VFA and export businesses must closely follow market information, strengthen forecasts and coordinate efforts to deal with fluctuations in prices, Bien says. – VOV

Tags: Vietnam rice market, Vietnam rice, Vietnam Rice prices