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Big rice contracts fail to lift prices

Update: April, 09/2012 - 11:22


Dong Thap Food Co workers load rice for export. Exporters gained a number of contracts in the first quarter, but rice prices have declined. — VNA/VNS Photo Dinh Hue
HCM CITY — Despite the reserve-purchase programme and larger rice export contracts won by exporters in the first quarter, the price of paddy went down last week, raising concern among farmers.

Paddy was priced at VND100 to 150 per kilogramme less than the previous week, with dried IR 50404 paddy fetching VND4,900-5,000.

Nguyen Van Tiep, a farmer in Can Tho's Co Do District, was unhappy because around 30 tonnes of paddy he harvested after the last winter-spring crop remains unsold.

"Saying my paddy is of low quality, traders tried to force prices down," he said, adding that earlier this week he had to sell some of it for just VND4,900 per kilogramme to get some money to prepare for the next crop.

Cao Van Nhi of An Giang Province's Tri Ton District said his high-quality paddy was priced at VND5,300-5,400 compared to the VND5,500-5,600 traders paid him in late March. Pham Van Bay, deputy chairman of the Viet Nam Food Association (VFA), blamed the limited warehousing capacity, large quantities of low-quality rice, and a decrease in export prices for the fall in paddy prices this week.

The association said in the first quarter Vietnamese companies signed contracts to export some 3.2 million tonnes of rice, a year-on-year increase of 15 per cent, mainly to Asian countries like mainland China, Indonesia, Malaysia, and the Philippines. However, exports to China have slowed down recently because there were not enough containers. The slow shipment of rice has affected storage capacity, with warehouses becoming full following the harvest of the winter-spring crop. With 1 million tonnes of rice (equivalent to 2 million tonnes of paddy) to be bought under the reserve-purchase programme, the volume of paddy to be stored in warehouses remains too big.

"VFA members have so far bought 650,000 to 700,000 tonnes of the 1 million tonnes of rice targeted under the reserve-purchase programme which will end on 30 April," Bay told Viet Nam News.

To facilitate the reserve-purchase programme, the governor of the State Bank of Viet Nam, Nguyen Van Binh, has ordered commercial banks to provide loans at low interest rates to enterprises joining the programme. — VNS

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