Mekong Delta provinces have proposed that the government increase this year’s rice export target to some 6 million tons from the current 5.2 million, given the expected bumper crops and large stockpiles.
The Ministry of Agriculture and Rural Development should review the country’s rice output and come up with an accurate estimate of rice production in order to make the right decision on shipment volumes, said Nguyen Van Duong, director of the Agriculture and Rural Development Department of Dong Thap Province.
He was speaking at a video conference between the Mekong Delta localities and the ministry on rice production and sales in the region.
Mekong Delta provinces harvested 9.92 million tons from their winter-spring crop, up 0.9 percent over the previous corresponding crop. The delta is expected to harvest a total of 20.7 million tons of rice in all three crops this year.
Meanwhile, rice stocks stand at nearly 1.4 million tons at present, of which the Southern Food Corporation maintains 592,000 tons, according to the Vietnam Food Association.
Nguyen Thanh Binh, director of the Department of Industry and Trade of An Giang Province, said the government should include the paddy that residents bring home after harvesting in border localities of Cambodia in the country’s total supply. He suggested the government increase the shipment target to 5.5-6 million tons of rice this year.
Vietnam Food Association Chairman Truong Thanh Phong said the country is expected to export 3.6 million tons of rice in the first six months of this year, of which nearly 3 million tons have been delivered.
Deputy Prime Minister Hoang Trung Hai said the government does not cap rice export volumes, and encouraged localities to seek more markets abroad.
However, adjustment of rice export volume will be carefully considered, he said, adding that if the rice export target increases to 6 million tons this year, prices could continue to plummet.
Agriculture and Rural Development Minister Cao Duc Phat said the ministry encourage firms to sign rice export contracts to reduce rice inventory among farmers.
Rice prices in the delta have now fallen by VND500 (2.8 US cents) per kilogram over April, mainly because of slower exports and purchases by firms, large stockpiles, and people waiting for them to go higher.
On average, rice prices are currently VND4,200-4,700 (23-26 cents) per kilogram, according to the Ministry of Agriculture and Rural Development.
Phong of the Vietnam Food Association said the world rice market is forecast to experience complicated changes in the coming time, as Thailand and India are expected to sell 3.8 million and 2 million tons of rice respectively of their stock.
Thus, importers have slowed their buying to follow the market changes, leading to a price reduction in the world market.
Van Ha Phong, deputy chairman of the People’s Committee of Kien Giang Province, said the government should soon establish a mechanism to purchase rice from local farmers and hold in temporary reserve while waiting for higher prices. Kien Giang alone needs to reserve 150,000 tons of rice to stabilize prices.
Nguyen Thanh Nguyen, vice chairman of the People’s Committee of Long An Province, said rice prices in his locality had gone down to VND4,000 per kilogram from VND4,500-4,600 a kilogram, making farmers worried. Meanwhile, farmers still have large stocks of rice, he said, proposing the government facilitate food firms’ access to bank loans with subsidized interest rates to purchase rice from farmers.
Deputy Minister of Industry and Trade Nguyen Thanh Bien said the fall in rice prices was mainly due to impacts of the worldwide supply and demand situation. Supply is estimated at 448 million tons of rice this year, higher than the anticipated demand of 443 million tons.
Minister Phat said localities should review their rice stockpiles and prepare a concrete plan for holding reserves. Rice prices have fallen, but supply pressures lie ahead when the country harvests its summer-autumn crop.
The Vietnam Food Association took considerable flak from farmers who accused it of making inaccurate forecasts and offering unsound advice on exports and shipment contracts.
Reported by Ngan Anh
Rice exports earn $1.25b to June 3
Source: 09/Jun/2009 Intellasia | 08/Jun/2009 Dau Tu