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Banks provide loans to buy rice reserves

Update: March, 06/2013 - 00:00

HCM CITY (VNS) — Twelve commercial banks have provided loans to food companies to enable them to buy paddy/rice for reserves while propping up prices.

Under a Government programme, the banks have provided the companies the credit interest-free for buying 1 million tonnes of products harvested from the winter-spring rice crop.

The Government is fully subsidising interest on the loans for three months.

Nguyen Van Hoan, deputy general director of OceanBank, said his bank is giving priority to food companies buying rice for reserves.

The State Bank of Viet Nam has approved Phuong Dong Bank's plan to earmark VND1 trillion (US$47.6 million) for the purpose.

LienVietPostBank said it has been involved with the rice reserve-purchase programme since 2010.

The banks' support for the programme has kept rice prices firm in 2012-13.

According to the Government's website, since the beginning of this year's programme started on February 20, the food companies have bought nearly 212,000 tonnes of rice, or 21 per cent of the target of 1 million tonnes to be brought from the winter-spring crop.

As a result, paddy/rice prices are slightly up in the Mekong Delta since the harvesting of the crop.

Fresh low-quality paddy is being sold (at the field) for VND4,400 per kilo, and high-quality paddy for VND4,600-5,300. These are VND150 to VND250 per kilo higher than a few months ago.

The Government's policy to buy rice for reserve has supported the grain's prices, improving the farmers' income, Deputy Minister for Industry and Trade Tran Quoc Khanh told provincial authorities from the Mekong Delta at a meeting recently.

The programme would also help regulate rice consumption and exports this year, he said.

Exporters have so far signed contracts for over 2.8 million tonnes of rice this year, double last year's volumes at this time of the year. — VNS

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