Cambodia Rice News: World Rice News: Vietnam Considers Biannual Rice Purchase Targets to Stabilize Prices

Vietnam Considers Biannual Rice Purchase Targets to Stabilize Prices

Vietnam’s Ministry of Agriculture and Rural Development (MARD) is considering setting biannual rice purchase targets for rice companies to stabilize prices and help farmers get better returns for their crop.

Rice prices in Vietnam usually plunge during the harvest season. While Vietnam’s rice exports have increased significantly in the last three months, prices have remained low, plunging almost 15% in July from average prices of around $463 per ton in June, mainly due to the onset of the new harvest season.

MARD held a meeting with industry experts last week to discuss changes in rules and regulations about the rice purchase process. The Deputy Minister said that the existing rules have to be modified because the government has little control over the rice companies which rarely bought rice directly from farmers. The MARD suggests that rice purchasing targets should be set and support be extended to farmers and rice buying companies during harvest periods to boost prices and profits.

According to the new rules proposed by MARD, one million tons of the winter-spring rice crop would be bought every year in February and March and held in temporary reserve. The ministry also recommends buying 1-1.5 million tons of the summer-autumn rice crop between July and September and stored for sales later. The Vietnam Food Association (VFA) will sell the rice to food companies, while the Ministry of Finance and the State Bank of Vietnam will provide the necessary capital for the rice buying programs, said MARD.

It's not yet clear if the rice will be bought at a set minimum price.

Last month the Vietnam Prime Minister asked the Vietnam Food Association (VFA) to encourage rice companies to buy half a million tons of rice between July 10 and August 10 to help boost prices but so far only about 250,000 tons had been bought.

Vietnam’s total rice exports from January to July 2012 have reached around 4.18 million tons, up about 10% from the 3.78 million tons exported in the same period last year. Vietnam is targeting exports of 2.1 million tons in the third quarter to help the nation meet its 2012 target of exporting 6.5 to 7 million tons of rice.

Source: Oryza/7August2012

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