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Consumption of rice is difficult in many markets

09:44 | 03/03/2019

VCN- In order to find out solutions for rice consumption for farmers, on February 26, in Dong Thap province, the Ministry of Agriculture and Rural Development cooperated with Dong Thap People's Committee and held a conference to promote rice production and consumption of Mekong Delta rice.

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Minister of Agriculture and Rural Development Nguyen Xuan Cuong spoke at the conference

Over 100,000 billion VND for rice loans

According to the leader of Dong Thap province, after the Prime Minister instructed to buy temporarily stored rice, the price of rice increased slightly, but still low compared to 2018. Currently, harvest time is when the demand for storage buying spikes. However, enterprises do not have enough credit lines to buy farmers' rice. Therefore, Mr. Nguyen Ngoc Nam, Chairman of Vietnam Food Association, asked the State Bank to study and direct the commercial banks to have their own credit packages for the purchase for reserves, with the maximum time of 6 months for enterprises to increase the purchase of all rice in March and actively select the appropriate selling time to help farmers have timely investment capital for the coming summer-autumn crop.

Mr. Le Tien Chau, Chairman of Hau Giang Provincial People's Committee also said that the price of winter-spring rice crop has decreased by 300 VND / kg compared to before the Lunar New Year, and decreased 1,000 VND / kg compared to the same period in 2018. With this price, farmers are still profitable but not much. Mr. Chau suggested that the bank should create an open mechanism for enterprises to access enough capital to buy rice. At the same time, the ministries should consider allocating the target of purchasing temporarily stored rice to stabilize rice prices in the localities.

In response to the above comments, Mr. Nguyen Quoc Hung, Director of Credit Department, State Bank, said that the State Bank will ensure to meet the capital demand of rice business enterprises.

According to the Governor of the State Bank, Mr. Le Minh Hung, in the coming time, in order to boost the support for rice consumption, the State Bank will direct the system of credit institutions to continue to focus on capital to meet timely demand of rice traders and rice producers with reasonable time limits and interest rates according to Decree 55/2018, Decree 116/2018 and Decree 107/2018 of the Government.

According to the State Bank's statistics, by the end of 2018, in the rice sector alone, the system of credit institutions in the whole country has lent about 99,000 billion VND, up 40% compared to 2017. By the end of January 2019, the outstanding loans for rice of the whole banking industry were estimated at about 100,000 billion VND. In particular, lending for rice production was about 23,000 billion VND; loans for purchasing and consumption rice about 63,000 billion VND, and for processing loans for preserving rice about 14,000 billion VND. Particularly in the Mekong Delta region, as of now, rice outstanding loans account for about 50% of the country's total rice outstanding loans. In which, mainly loans for purchasing and consumption rice with outstanding loans estimated at 28,000 billion VND.

Many challenges for export

Speaking at the conference, Minister of Agriculture and Rural Development Nguyen Xuan Cuong said that this year rice production was very high, while export activities faced difficulties, causing rice prices to fall.

Accordingly, from the end of 2018 until now, the consumption of rice met some difficulties. The volume of exported rice in January 2019 was estimated at 373,000 tons with a value of 167 million USD, down 24% in volume and 30% in value compared to the same period in 2018. China, the largest market has leveled off, while other markets have not shown signs of prosperity. International markets are continually increasing competition in quality, categories and requirements for export quality inspection.

The Ministry of Industry and Trade also assessed that Vietnam has not had a national rice brand, making it difficult for Vietnam's rice exports. Vietnamese rice seeds are currently facing stiff competition with major exporters such as Thailand, India and some emerging countries such as Cambodia, Myanmar and Pakistan with superior quality rice varieties.

Notably, ASEAN glutinous rice is subject to a tax of up to 50% when exported to the Chinese market, which has led to the export of sticky rice to this market continuously declining since the beginning of 2019. Besides, China has opened rice exports to India and licensed 24 businesses in this country while Vietnam has only 19 enterprises. The Chinese government has also publized it wants to expand new sources of rice imports such as from Cambodia, by increasing the quota from 300,000 to 400,000 tons.

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VCN- The Government has issued Decree 107/2018/ND-CP, in which specifying conditions of rice export business.

In addition, many countries such as Indonesia, Malaysia, and Philippines... are currently increasing investment in rice production to reduce imports. Besides, the Philippines also wants to expand rice supplies by signing a Memorandum of Understanding with Pakistan and Myanmar; Indonesia has stated that Indonesia's reserve of rice is sufficient until the end of June 2019, so it may be after July 2019 that Indonesia needs to import rice. African countries (accounting for nearly one-third of Vietnam's total rice exports) are also actively implementing programs to ensure food self-sufficiency...

By Khai Ky/ Huu Tuc