This is the sharing of Ms. Bui Thi Thanh Tam - Chairwoman of the Board of Members of the Northern Food Corporation, at the spring meeting of typical state-owned enterprises organized by the Government Standing Committee on the morning of March 3, in Hanoi.
People still profit
Ms. Bui Thi Thanh Tam said that entering 2024, according to information from the Ministry of Agriculture and Rural Development, rice output is expected to still reach 43 million tons and after being reserved for domestic consumption and ensuring food security, the amount for export is targeted at 7.5 - 8 million tons of rice. Currently, it is March 2024, in the main winter-spring crop, this is the largest crop of the year with a harvest of about 6 million tons of rice, of which 3 million tons are for export.
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| Farmers in Hau Giang harvest rice. Photo by Hien Thanh |
Recently, there was information that rice prices decreased by about 30% and businesses and importers were slow to buy to wait for prices to drop. Regarding this issue, the reason is that rice prices, which had been continuously increasing in the third and fourth quarters of 2023 after India's export ban, have decreased since mid-January 2024, from over 9,000 VND/kg to 7,300 to 7,800 VND/kg. Although the price has decreased, it is still higher than that of the 2023 Winter-Spring crop and especially higher than the prices of previous crops.
Ms. Tam also affirmed that the current rice price still makes people profit about 60% according to the production cost announced by the Financial Association, which is about 4,000 VND/kg and decreased on the basis of the sudden high price. In 2023, the price increased suddenly and now the price has decreased but decreased on the basis of the previous high price.
Previously, the Government set a target of ensuring 30% profit for the people. Looking back at Vietnam's export history, we have now entered the 35th year of Vietnam's participation in rice exports. Almost every year, during the winter-spring crop, meetings about rice become a hot topic.
The government cares a lot about farmers. There were times, about 7-10 years ago, when the rice price was below the cost price, the government would buy and store the rice temporarily and let businesses buy it to increase the price of farmers' rice.
By doing this, the Government has to compensate for bank interest support and does not guarantee the market rules. However, up to now, not only have we had a good harvest but we have also had good prices. This is a great success and this is also a process of restructuring the agricultural sector and close direction of the Government.
The main reason for the fall in rice prices
The reason for the recent drop in rice prices, according to Ms. Bui Thi Thanh Tam, is that it is the main harvest season, all fields are harvested, and all provinces are harvesting at the same time.
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| Ms. Bui Thi Thanh Tam, Chairwoman of the Board of Members of the Northern Food Corporation: We only account for 15 - 18% of the world's total rice export volume. - Photo: VGP/Nhat Bac |
The reason is that last year, when the price was good, the provinces sowed seeds at the same time and the farmers were very excited, so they implemented it together. Now, all regions are harvesting at the same time, causing congestion from the fields, from the factories, and even from the inland ports. Furthermore, to purchase 6 million tons of rice, we have to prepare bank credit and logistics, so it will be congested and slower.
Moreover, Thailand, Philippines, and Indonesia are also harvesting in March-May. In addition, some African countries currently have a lot of rice in stock. The Philippines currently has a high price of rice, so they have to consume it domestically first, then continue to import.
"Recently, the General Food Corporation offered to some importers, but they said "they will study further and can discuss later". World market prices are currently being adjusted. We only account for 15 - 18% of the total rice export volume of the world" , Ms. Tam said.
Last January, Vietnam participated in a bidding in Indonesia with a very large quantity, the total invited quantity was 500,000 tons, but Vietnamese exporters won nearly 400,000 tons at a high price.
With the current price, farmers are completely profitable and very excited, and certainly with this price, farmers will continue to increase production.
In the coming time, the Government and ministries, departments and branches have forecasted that 2024 will be a year of continued high demand for rice and current importers continue to have plans to implement.
Businesses continue to buy rice
Regarding consumption, Ms. Bui Thi Thanh Tam informed that currently, the Northern and Southern Food Corporations are both implementing the direction of the Prime Minister and the Chairman of the Capital Management Committee to continue buying and since Tet until now, they have bought about half a million tons of rice and have been buying continuously day and night without any break, and affirmed that they will continue to buy in the coming time.
It is also informed that currently, warehouses of private companies are also implementing rice purchases.
This morning (March 3), the Corporation received a new Directive from the Prime Minister issued yesterday (March 2). In this Directive, the Prime Minister directed ministries, departments, branches, the Vietnam Food Association, provinces and especially the two state-owned food corporations to increase production in the new situation to ensure domestic food security and at the same time ensure exports. If we can implement this Directive, we will not only worry about short-term steps but also ensure long-term goals.
At the event, representatives of the Northern Food Corporation also made 3 recommendations to the Government and relevant ministries and branches.
Firstly, with the General Department of State Reserves, normally in March, the General Department will organize a bidding for about 200-250 thousand tons of rice. This amount is enough to contribute to stimulating demand. If conditions permit, we suggest that the General Department of State Reserves and the Ministry of Finance carry out the reserve purchase program early because businesses need contracts to implement and especially to ensure quality in the warehouse.
Second, the State Bank and the commercial banking system are interested in rice exporting and processing enterprises. This year, the situation is difficult, so we suggest that banks continue to pay attention, reduce interest rates, and loosen lending conditions.
Third, regarding the Project on sustainable development of 1 million hectares of high-quality rice cultivation, this is a project of great significance both domestically and internationally. It is recommended that the Government assign ministries, branches and provinces to implement the project, and summarize the previous large-scale field program. When organizing the conference, it is recommended that ministries and branches invite the business community to participate.
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