Falling Paddy Prices, Rising Stocks Prompt Trade Ministry Intervention

The Ministry of Industry and Trade has asked the Vietnam Food Association (VFA) to take the initiative to boost rice exports in order to assure farmers of stable purchases and meet the Government’s export target of 4.5 million tons for the year.

The Vietnam Food Association is asked to boost rice exports in order to assure farmers of stable purchases and meet the Government's export target of 4.5 million tons for 2008

The association has been asked to take more steps to help enterprises complete and sign contracts negotiated by the Government, as well as negotiate contracts on its own in new markets.

The ministry has asked the Prime Minister to assign VFA the task of estimating the amount of rice in reserve, and the capacity of the market to consume it.

Purchases and prices of paddy continued to drop sharply in the Mekong Delta last week.

Wet paddy was traded at VND2,500-2,700 per kilogram and dried paddy was priced at VND3,500-3,700 per kilogram on September 14.

They were the lowest prices so far this year, inflicting huge losses on farmers who spent VND3,300-3,900 producing one kilogram of dried paddy.

This is the first time Mekong Delta rice farmers are facing such a dire situation.
It is estimated that rice farmers in the provinces of Dong Thap, Kien Giang, An Giang, Tien Giang, Can Tho, Hau Giang, Soc Trang, Vinh Long and Tra Vinh have 100,000-600,000 tons of paddy in stock.

Rice prices have also decreased dramatically at VND5,200-5,700 per kilogram.

Food companies, on the other hand, are also dealing with huge stockpiles one month after increasing their purchases under a prime ministerial directive.

Now they are faced with the problem of finding space to store the new crop.

The Government has ordered banks to provide food companies with sufficient funds to buy rice, but the situation on the ground is that they cannot borrow any money until they pay off earlier loans.

By staff writers – Translated by Hoang Yen

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