Since the beginning of March, businesses have been stockpiling one million tons of rice at the behest of the Vietnam Food Association (VFF), at a minimum price of VND5,000 per kilogram.
|A rice stockpile in the Mekong Delta. (Photo: SGGP)|
Rice is being stockpiled at a time when prices are at their highest, giving added incentive to farmers in the Red River Delta. The world rice prices too have been increasing, encouraging businesses to stockpile.
Dr. Le Van Banh, head of the Mekong Delta Rice Research Institute said that the winter spring rice crop production was over 1.5 million in the delta region, yielding an output of over 10 million tons.
Nguyen Trung Kien, general director of Gentraco Company said that his company would stockpile 25,000 tons of rice.
Besides paying farmers at the market price, the company has paid an extra 3-5 percent for high quality rice. Several companies have also bought more rice directly from farmers at a high rate of VND6,500 a kilogram.
According to the Department of Industry and Trade in Dong Thap Province, five businesses were buying 58,000 tons of rice there as per VFF instructions.
Meanwhile, the Department of Industry and Trade in An Giang Province revealed that rice stockpiling was continuing as per schedule.
Although VFF and companies have done a good job of stockpiling rice, authorities in the provinces are concerned that the price of rice may tumble at peak time during harvest of the winter spring crop.
Nguyen Van Dong, director of the Department of Agriculture and Rural Development in Hau Giang Province said that the input costs of this years winter spring crop had been very expensive due to erratic weather conditions and the price increase of agricultural materials, petrol etc.. The cost price in some areas was as high as VND3,700-3,800 per kilogram.
To ensure farmers’ profit, Dr. Banh suggested that businesses that have been instructed to stockpile rice should buy quickly and not wait for the peak harvest season when prices tumble. They should also buy directly from farmers and not traders to make a more profitable margin.