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VietNamNews

Delta farmers rue drop in rice prices

Update: June, 25/2012 - 09:53

by Le Hung Vong

Farmers in the Cuu Long (Mekong) Delta may be reaping a bumper summer-autumn rice crop with an average yield of 6.5-7.5 tonnes per ha, but they are unhappy after paddy prices plunged last week.

Nguyen Phuoc Toi of Dong Thap's Thap Muoi District said paddy prices kept falling during the week, adding that farmers with yields of 7 tonnes could earn meagre profits of VND5 million per ha while those with lower yields would suffer losses.

On June 22 paddy prices fell to VND4,200-4,300 per kilogramme in An Giang, Vinh Long and Dong Thap provinces, while that of undried IR50404, a cheap variety, fell to VND3,600.

Tran Tam, a farmer in Dong Thap's Thanh Binh District, said: "Production costs are estimated at VND4,500-5,000 per kilogramme. At current prices, farmers are suffering losses of VND3-4 million per ha."

Those who cultivated IR50404 variety could suffer losses of up to VND6 million per ha, he added.

A Can Tho city trader said rice processing firms are focusing on exporting grain from the last winter-spring crop rather than buying paddy from the latest crop, sending prices tumbling.

The manager of an An Giang-based rice processing company told Viet Nam News that rice trading companies were reluctant to purchase summer-autumn paddy because of the large volumes of rice stockpiled from the last winter-spring crop and the fierce competition from low-grade rice from India, Pakistan and Myanmar.

Rice exporters are facing similar challenges as Mekong farmers, he added.

Viet Nam's rice exports have slumped recently because many contracts signed with Chinese importers have been cancelled.

So far this year it has shipped 2.9 million tonnes, 20 per cent down year-on-year, Pham Van Bay, deputy chairman of the Viet Nam Food Association, told a meeting on Thursday.

The country hopes to export 6.5-7 million tonnes in the full year, he added.

International prices of 5 per cent broken rice from Viet Nam have dropped by US$5-10 per tonne to $410-415, while prices of 25 per cent broken rice have fallen by around $20 to $360-370 per tonne from a month ago, according to the Viet Nam Food Association.

The VFA has sent a dispatch to the Ministry Agriculture and Rural Development to announce farmers' production costs for the crop that is being harvested

Meanwhile, at a meeting on Thursday, central and provincial agricultural officials agreed that the Government should approve a plan for food companies to buy and stockpile one million tonnes of rice from the summer-autumn crop to enable farmers to sell their crops and prop up prices.

Real estate stays stuck

Despite sharp price cuts and interest-free loans by property firms to buyers, the real-estate market has shown no signs of revival.

In HCM City, there has been a 50 per cent fall in the prices of houses and land since 2009. These include the VND11.4 million per square metre for 50sq.m apartments at the E-Hom project and less than VND10 million for the semi-finished apartments at the Pho Dong project, both in District 9.

But demand remains very low, leaving property firms with an expanding inventory of houses and apartments even as their bank loans come up for repayment.

Nguyen Van Duc, deputy director of Dat Lanh Property Co, told Vietnam News Agency that the property market remains "frozen" because prices are much higher than what people with actual demand for accommodation can afford.

Ha Noi faces the same situation, with the property market stagnating since early 2011 and house and land prices dropping by 30-40 per cent compared with two years ago. Similar promotion campaigns have been to no avail.

Though officials at the Ministry of Construction and property consultancy companies like Savills and CBRE swear housing and land prices cannot drop further since they have hit the bottom, demand remains stubbornly unchanging.

Le Duc Hai, chairman of property company ANT Group, said most developers have attained "clinical death" after two years of stagnancy in the market.

Those firms that have survived the last stagnancy should consider a further reduction in prices so that they encounter a possible harsher situation in the next year or two.

Duc of Dat Lanh Co said HCM City property firms expect approval from the Government for them to build small apartments (of 25-30sq.m) which could boost demand from low-income customers and help breathe life into the market.

Firms with unsold 70-100sq.m apartments could divide them into smaller ones and sell to survive.

Natural disasters cost $3.5b

Natural disasters caused losses worth VND73.8 trillion ($3.5 billion) in the central region in the last decade, or 63.8 per cent of the country's total.

The 14 central coastal provinces from Thanh Hoa to Ninh Thuan also saw 2,445 people being killed or go missing, nearly half of the country's total losses.

A report from Central Steering Committee on Natural Disaster Prevention and Mitigation says since 2000 the region has suffered from twice as many natural disasters as the rest of the country, with two to three times the human and economic losses.

Transportation, irrigation, and hydropower systems, civil construction works, socio-economic projects, and industrial parks have worsened the impacts of disasters, according to a Government report released at the mid-year Consultative Group Meeting in central province of Quang Tri two weeks ago.

The country's main transport networks – such as the National Highway No 1 A and north-south railway – have blocked the natural flow of floodwaters, the irrigation and hydro-power reservoirs have reduced forests which were the natural flood regulatory systems, and urbanisation has caused blockage of natural water flow, worsening flooding.

The report says the need for resources to prevent natural disasters is increasing but the Government's allocation does not meet it.

Addressing the meeting, Deputy PM Hoang Trung Hai said the central coast is the most populous region in the country with nearly 19 million people, or 21.9 per cent of the national population.

But it is not on the economic forefront, he said, pointing out that its per capita income of VND14.7 million in 2010 was just 66.3 per cent of the national rate.

The poverty rate was much higher than the national rate – 20.4 per cent compared to 14.2 per cent.

"The central coast, particularly its northern part, is still one of the poorest regions, only behind the north-west mountainous region and the Central Highlands, which comprises 25 of the country's 62 poorest districts," Hai said.

Efforts have been made to reduce the rate of poor households in the region to below 10 per cent in the coming years, he made.

"There was broad consensus on the need to make further progress jointly on a number of fronts, including … better river basin planning and flood management systems, expanded coverage of early warning systems, natural disaster risk planning, and integration of risk assessment into infrastructure investment planning," a press release from the World Bank at the end of the CG meeting said. — VNS

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