Vietnamese rice exporters are scheduled to stock pile 1 million tonnes of milled summer-autumn grain for three months beginning July 15 to support domestic prices, an industry official said on Monday.
Keeping the volume of rice, equivalent to a quarter of the current crop output, off the market would help stabilise prices — a move Vietnam often takes each year when rice harvesting in the Mekong Delta food basket peaks. Last year, the country stock piled 2 million tonnes in two phases.
Fresh demand from the Middle East, Africa and Bangladesh lifted Asian rice prices last week but the increase may not last because supply is rising in the world’s top two exporters, Thailand and Vietnam, traders said.
Foreign buyers have been waiting for prices in the world’s second-largest rice exporter to ease when the summer-autumn crop harvest peaks from July, traders say.
Around 80 exporters would join the purchase until Aug. 30 to prevent prices from falling below 5,000 dong (24.3 U.S. cents) per kg during the peak of the harvest, the official said, confirming a state-run media report.
“Businesses joining the scheme will have no support on interest rates, they will take the responsibility on their own,” the official said by telephone from Ho Chi Minh City, Vietnam’s largest rice trading market lying next to the Mekong Delta.
In previous years, rice firms joining government-backed stockpiling programmes could get state subsidy by getting interest-free loans to procure the grain. Vietnam stopped the subsidy this year as it stepped up the fight against inflation.
Farmers have so far harvested 94,000 hectares (232,300 acres), or just nearly 6 percent of the 1.62 million hectares of the Delta’s summer-autumn crop, which has been projected to produce 8 million tonnes of paddy, the association said.
Summer-autumn paddy has eased around 5 percent in the past week to around 5,500 dong per kg as the harvest picks up steam.
The Delta produced 24 million tonnes of paddy in 2010, or 60 percent of Vietnam’s total, but supplied 90 percent of the country’s exportable grain.
The summer-autumn crop is the Delta’s second highest-yielding crop after the winter-spring season. But unlike the grain from the other crop which mostly goes to exports, summer-autumn rice is used for both domestic consumption and exports due to lower quality.
Vietnam has revised up by a quarter its rice export forecast for this year to a record high of between 7.1 million and 7.4 million tonnes after a rise in shipments in the first quarter, the Agriculture Ministry said.
Last year it shipped 6.83 million tonnes of rice, which is already a record. ($1=20,555 dong)