Rice fever to be stamped out in some days

19:13' 28/04/2008 (GMT+7)
VietNamNet Bridge – Rice trading companies are bringing rice to HCM City in an effort to stamp out the rice price fever, according to Nguyen Thi Nguyet, Secretary General of the Vietnam Food Association (VFA).
Rushing to buy rice, prices skyrocketing
Food supplies sufficient for both consumption and export, assures PM
The rice price has doubled in the last few days, now staying firmly at the highest-ever peak in history. Do you think the high prices will last for a long time?
Scrambling to buy rice at a rice shop on To Hien Thanh street in HCM City (Photo taken at 10 am April 27)
I can affirm that the rice fever on the domestic market will be stamped out in some days, when rice export companies sell rice to the market. The Southern Food Corporation said that on April 27 it began bringing rice to the HCM City market, and it will bring more rice after considering the market demand.
I have to say that we don’t lack rice, because the rice volume in stocks of VFA member companies proves to be relatively big. Some companies have reported they have 20-30,000 tonnes in stock after fulfilling export contracts.
Many rice exporters contacted us on April 27 after hearing of the short supply of rice on the domestic market, pledging to provide rice immediately to the localities that have demand. Kien Giang and An Giang-based companies say they can provide tens of thousands of tonnes of rice right now.
Why has the supply shortage been occurring while rice companies, as you have said, still have much rice in stocks?
It originated with unfounded rumours and information, as well as speculation.
A lot of businesses, which have been specialising in some farm produce like pepper or cashew nuts, and enterprises, which have been operating in the real estate sector, have also jumped into rice trading recently, because they think the job can bring high profit. Meanwhile, husking workshops and private rice suppliers have been storing rice for speculation.
Do you think that the high volume of exports in the last time have led to the price increases on the domestic market?
To date, Vietnamese enterprises have signed contracts to export over 2.2mil tonnes of rice, and have delivered 1.1mil tonnes, both of which figures are lower than those of the same period last year. Therefore, it is illogical to say that exports have badly affected the domestic supplies. Moreover, rice exporters now have a big inventory volume of 1.1mil tonnes.
Vietnam plans to export 3.5-4mil tonnes or rice in 2008. Do you think that the domestic market will face a rice shortage by the end of the year with the exports?
I can say for sure that a rice shortage will never occur. Cuu Long River Delta had a bountiful winter-spring crop with the total output of 9.4-9.6mil tonnes. Meanwhile, the region is expected to harvest 7.3-7.5mil tonnes this summer-autumn crop. The total output of the two crops alone is 16.5-17mil tonnes, equal to 8.5-9mil tonnes of rice. If Vietnam exports 3.5-4mil tonnes of rice, the volume of rice left will still be very big.
The Cuu Long River Delta will begin harvesting the summer-autumn crop in early June. Meanwhile, Thailand will also harvest at the same time (the country has the inventory level of 4mil tonnes). It is likely that the rice price on the world’s market will decrease. It would be risky to speculate rice at this moment.
Trang Hieu Dung, Head of the Planning Department under the Ministry of Agriculture and Rural Development (MARD)
We cannot see any abnormal thing in the rice supply and demand. Vietnam absolutely is not lacking rice. The government and MARD anticipated the rice shortage in the world’s market and thought of long-term measures to stabilise the market. The government has ordered businesses to not sign new contracts in order to ensure domestic food security and prevent food prices from rising.
Prof Dr Vo Tong Xuan, Rice Expert
When the rice price began increasing, speculators began buying rice in large quantities for speculation, which has led to the ‘virtual’ rice shortage. Urban local residents rush to buy rice for fear that rice is in serious shortage.



The thing that the government can do now is release an order to prohibit speculation. Local authorities well know how many hectares of rice fields their localities have and how many tonnes of rice their farmers will get. Individuals and enterprises who are found speculating rice will be heavily punished.



Moreover, the state should resume rice exports in order to help reduce speculation and stabilise domestic prices.



HCM City authorities: the city will not lack rice



Deputy Mayor of HCM City Nguyen Thi Hong on April 27 in the afternoon said that some 2,000 tonnes of rice were being marketed through the city’s distribution network.



On the same day, Nguyen Ngoc Hoa, General Director of Saigon Co-op, said that after the urgent meeting with the HCM City’s People’s Committee, the HCM City Food and Foodstuff Company and Vinh Phat Company agreed to provide 2,000 tonnes of rice to Saigon Co-op, so that the Co-op chain could maintain the distribution of rice to local residents.



On April 27 in the afternoon, a member of the Southern Food Corporation brought 50 tonnes of rice to HCM City to deliver to Co-op Mart.