Rice price drop, narrowed markets make farmers, exporters weep bitterly

09-Jun-2012 Intellasia | Vietnamnet | 7:01 AM Print This Post

The bountiful crop does not make farmers happy, because the rice price has dropped dramatically. Meanwhile, exporters have been put on tenterhooks since it’s very difficult to find importers at this moment.

Farmers cry about price drop

Le Thi Nhung in Le Thuy district of Quang Binh province said that the rice yield is really high at 7000 kilos per hectare, but the profit is lower than that of the previous crop. “Everything is getting more expensive, from rice varieties, fertiliser, harvesting to transport fees. Meanwhile, the rice price has dropped dramatically,” Nhung said.

Though the prices have been decreasing, merchants do not intend to buy rice to store at this moment. “Harvested rice has piled up in my house, because there is no buyer,” Nhung said.

“Our five-member family lives on the rice fields. I urgently need money to cure my husband and to feed my two children who go to school. However, no one wants to buy rice now,” she complained.

The farmers of An Thuy cooperative also said that they need to sell 700 tonnes of rice to pay debts, but the rice has been left unsold, though the price has dropped to 4 million dong per tonne.

“At the same time of the last year, we could sell rice to merchants for 7 million dong per tonne right at the rice fields,” Nhung said.

According to Nong nghiep Vietnam, there are 1000 hectares of rice in Hoa Thuy commune with the high yield of 7050 kilos per hectare. A lot of farmers have got a bountiful crop, harvesting 50-100 tonnes or rice.

However, the rice remains unsalable. Some farmers said they have 20 tonnes of rice unsold, including the rice of the previous crop. If they harvest all the rice now, they would not have storehouses to keep. Meanwhile, if they sell rice now, they would incur heavy losses.

According to Nguyen Dang in Gia Ninh commune of Quang Ninh province, he has to spend 1.6 million dong on average for every 500 square meters of rice fields. Meanwhile, with the current sale price, he would get 1.4 million dong only, which means that he loses 200,000 dong for every 500 square meters, and 4 million dong for every hectare.

Though rice reaps profusely on the fields, farmers do not want to harvest rice now, because they do not know where to put the new rice. In general, they harvest rice and sell rice before they make another harvesting. However, as farmers cannot sell rice, they would rather leave the rice on the fields.

Exporters worried stiff because of market narrowing

A director of a rice export company in Mekong Delta has revealed that he still has 10,000 tonnes of rice in stocks. The majority of the inventory volume has been carried forward from 2011. The export price in 2012 is 2000 dong per kilo lower than the last year’s price. As such, with 10,000 tonnes of rice in stocks, his enterprise has been sure of the big loss of 20 billion dong.

The exporter said on Thanh Nien that in late 2011, he moved heaven and earth to look for importers, but he still could not sell the rice. Contrary to the predictions that the price would bounce back earlier this year, the price keeps decreasing since the beginning of the year.

“The estimated loss of 20 billion dong does not include the bank loan interests,” he said.

Pham Van Vay, deputy Chair of the Vietnam Food Association (VFA), though declining to reveal the figures about the inventory volume, has admitted that it is very difficult to export rice now because there are too many rivals.

Bay said that India, Pakistan and Myanmar have been trying to push up exports, accepting to cut down prices. Especially, India sells 5 percent broken rice at 420 dollars per tonne only. Meanwhile, it has advantage in selling rice to Africa, the Vietnamese main export market, thanks to the cheaper transport fees.


Category: Business

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