Ministry of Industry and Trade is searching opinion of relevant agencies about applying compulsory storage on some essential commodities such as rice, sugar, steel, fertilizer, foodstuff. Accordingly, the maximum reserve on sufar is expected at 10% of sugar volume that traders are granted import quota, the VnExpress reported.
As for producers, the reserve ratio is 5% of output.
Fertilizer, rice, steel and foodstuff are subject to the storage ratio of between 5% and 12% depending on each kind.
Retail price of compulsorily stored commodities must be at least 10% lower than market prices at the selling time according to Ministry of Finance’s announcement. Depending on movements on the market, Minister of Industry and Trade will decide to adjust up or down the statutory storage on each kind of commodity. Gap between two adjustments will be 10-30 days.
Traders and producers will have to ensure timely and adequate supply of the essential commodities in each geographical area as seeing sudden imbalance of demand and supply. They also have to control and limit insuitable price increases, fight against speculation causing to damage benefits of customers. Traders who are subject to statutory circulation storage will enjoy preferred policies in credit, forex volume for import.
Nguyen Thanh Long, Chairman of Vietnam Sugar and Sugarcane Association said that sugar production was seasonal so the storage of this commodity is essential to ensure stably domestic price. But, in his opinion, the statutory storage ratio of 10% is not suitable because if domestic supply meets demand without import, the regulation by that time will not be implemented.
Therefore, Long proposed, sugar storage should be applied on only producers and traders. Traders need to store 5% of sugar volume and producers need 10% to ensure market stabilization.
Previously, Vietnam Steel Association also contributed its point of view to compulsory storage on steel.