Consortium to buy up surplus rice

The Viet Nam Food Association (VFA) plans to purchase 1 million tonnes of summer-autumn rice between July 15 and August 30, but enterprises are concerned over a lack of capital for purchasing activities.

The association’s 80 member enterprises will purchase 1 million tonnes for temporary stock in order to maintain the price of rice at VND5,500-6,000 per kilo and ensure farmers are making a profit.

The price of rice had started to fall in the Cuu Long (Mekong) Delta provinces of Dong Thap, Tien Giang and An Giang, said the association.

Duong Nghia Quoc, director of the Dong Thap Department of Agriculture and Rural Development, said the VFA’s plan was a good sign for farmers, but a lack of capital would affect purchasing activities and exports.

“High interest loans will affect purchasing activities because exporters are reluctant to take them out at the moment,” said Cao Thi Ngoc Hoa, deputy general director of the Southern Food Corporation.

“Only those that have already signed export contracts will purchase now,” Hoa said.

“If enterprises are still waiting to sign export contracts, they will be forced to take out high interest loans with interest rates of up to 20 per cent in order to purchase rice for future export,” said Tran Van Hung, deputy director of a rice exporter in the southern province of Dong Thap.

High interest loans would also affect investment in warehouses and drying facilities that were needed to increase the value of rice in line with new Government standards for rice exporters that become effective on October 1, she said.

Only the An Giang Import Export Joint Stock Company (Angimex) has reached the standards necessary to be awarded a certificate by the Ministry of Industry and Trade under Decree 109 on trading and exporting rice.

“It is true that rice trading and exporting enterprises have lacked capital to trade and export rice, or build warehouses and drying facilities, but they should still meet the regulations outlined in Decree 109 to ensure a transparent rice export market in Viet Nam,” said Cao Van Hoa, deputy director of the Tien Giang Department of Agriculture and Rural Development.

According to the VFA, Viet Nam expected to export 3.9 million tonnes of rice in the first half of this year. — VNS

Tags: Vietnam rice, Vietnam Rice prices