The latest outbreak of the pandemic has negatively affected the paddy and rice supply chain, especially in the Mekong Delta region. — VNA/VNS Photo

HÀ NỘI — The Governor of the State Bank of Việt Nam (SBV) Nguyễn Thị Hồng has directed commercial banks in the Mekong Delta region to support rice producers and traders to overcome difficulties amid the COVID-19 pandemic.

The latest outbreak of the pandemic has negatively affected the paddy and rice supply chain, from production and distribution to consumption and export, especially in the Mekong Delta region.

Under Document No 5747/NHNN-TD issued earlier this week, commercial banks must ensure they fully and promptly meet capital needs and expand credit limits for rice traders so they have enough capital to purchase more paddy and rice, and increase their storage, preservation and processing establishments.

Banks also need to step up reforms and simplify their internal procedures to shorten the loan approval time besides diversifying appropriate credit products and working directly with rice traders and businesses to have effective solutions to overcome difficulties.

However, the SBV noted, the lending must still meet the Government’s current credit rules to ensure legal cash flow management and debt recovery.

It is necessary to continually promote the implementation of credit policies for agricultural and rural development, of which focus is placed on lending to models of chains from paddy and rice production to purchasing, processing, preservation and consumption, according to the SBV.

Banks need to continually implement solutions, such as restructuring repayment terms, keeping the debt group unchanged, exempting and reducing interest and fees for loans, to remove difficulties for COVID-19-affected customers, including rice producers and traders, to help them restore production and business.

They must follow closely the rice market’s developments and lending to purchase and temporarily store paddy and rice in the area to promptly report and propose solutions to the provincial and municipal People's committees during the implementation.

According to Đỗ Hoài Nam, Chairman and General Director of Intimex Group, complicated developments of the COVID-19 pandemic have made it difficult for rice trading. Rice traders are facing obstacles due to social distancing measures, especially in the stage of loading and unloading, causing big problems for exporters.

Nam underlined the significance of promptly controlling COVID-19 as well as faster vaccinations for workers in food producing and processing companies.

The Việt Nam Food Association also said due to pandemic prevention and control regulations, it is difficult for domestic companies to buy, process and export rice. Meanwhile, the opportunity is high for Việt Nam to increase exports as global demand is rising and supplies are falling, especially from big exporters like India and Thailand. 

Rice supply chain faces risk of disruption 

The Ministry of Agriculture and Rural Development said more than 1.5 million hectares of rice in the Mekong Delta with eight million tonnes are ready for harvest, but there are no traders to buy the grain.

Farmers in the south are unable to sell their produce while consumers are struggling to buy food, a frustrating paradox created by COVID-19 travel restrictions and the closure of both wholesale and retail markets.

The threat of disruption in the supply means prices have fallen by 10-25 per cent from a month ago, or VNĐ500-800 per kilogramme.

However, farmers still cannot sell their rice.

Trần Văn Nam of Cần Thơ City said he has just harvested around 20 tonnes of high-quality rice. Two months before the harvest, a trader came and deposited VNĐ9 million for his rice and agreed to buy at VNĐ6,000 a kilogramme, but since social distancing began and transportation has become very difficult, the trader has opted to forfeit deposit and prices have started to fall relentlessly.

Nguyễn Văn Kiên, a large rice trader in Cần Thơ, said many traders have chosen to forego deposit rather than buy the rice at the committed prices since that would increase their losses.

"In previous years in the summer-autumn rice crop I used to buy 50,000-60,000 tonnes of rice from farmers in Hậu Giang, An Giang, Bạc Liêu, and Kiên Giang provinces, but this year I bought only 5,000 tonnes because I cannot transport it to large markets like HCM City."

He has 100 employees buying rice from throughout the delta, and they all have to carry COVID-19 negative test results that are only valid for three days while the procurement takes them one to two weeks, he said.

The Việt Nam Food Association said since social distancing began, half of the 120 rice enterprises in the delta have suspended operations and the rest have reduced their capacity by half.

To resolve these problems, the Vietnam Food Association calls for the Ministry of Industry and Trade and other related ministries to create favourable conditions for traders to buy and distribute rice by prioritising for vehicles rice transporting the grain and vaccinating workers in the rice and food supply chains.  VNS