Storage enterprises neglect low-grade rice
By Pham Thai and Trung Chanh - The Saigon Times Daily
HCMC/CAN THO – The enterprises participating in the program to purchase one million tons of rice for temporary storage are prioritizing buying high-grade rice given the huge demand for this category from the Chinese market.
Director of a storage enterprise in An Giang said the Chinese market now has high demand for the 5% broken rice. Therefore, his company will prioritize purchasing high-grade long-grain rice to sell to Chinese partners, who are seeking to sign export contracts.
He admitted his firm hardly buys the low-grade paddy that is currently in peak harvest season since no new contract has been signed with the low-grade rice importers, such as the Philippines and several African countries.
“We need to be sure there are consumption markets before buying rice for storage,” said he.
Pham Phong Phu, director of Phu Binh Food Co. in Dong Thap, said: “The export situation is very difficult during these months. Since the year’s beginning, my company has exported only thousands of tons, mostly to China and Malaysia.”
A source told the Daily that local enterprises have signed contracts to export some 420,000 tons of rice to China.
Private rice trading firms in Ba Dac wholesale market and An Thanh Dong Industrial Cluster are spending these days delivering rice to traders in the northern region.
Nguyen Phuc Anh, director of Tan Tai III Company in the Tien Giang-based Ba Dac market, said since enterprises started to buy rice for temporary storage last Thursday, the purchasing power, especially of the low-grade paddy IR 50404, has significantly improved. Enterprises in Tien Giang have begun to store material rice albeit little, which helps push up the prices of IR 50404 rice products.
Particularly, the IR 50404 material rice has marked up to VND6,800-6,850 per kilo, while the finished rice is sold at VND8,000-8,200 a kilo. Anh said enterprises still store the low-grade rice IR 50404 because this category has good quality this winter-spring crop.
Concern over low efficiency
There are five enterprises in Dong Thap participating in the rice storage program with the assigned target to purchase 64,000 tons or rice, equivalent to 130,000 tons of paddy, versus the total 1.6 million tons harvested in this winter-spring crop.
With such a small amount, the rice storage program only has temporary effects on the market prices, said Duong Nghia Quoc, director of the Dong Thap Department of Agriculture and Rural Development.
He said the province has yet to receive any offer from the Vietnam Food Association (VFA) to join hands in supervising rice purchase and storage, like what the vice chairman of this association had told the media before the program was kicked off.
He expressed concern about the fact that enterprises prefer buying fragrant and long-grain paddy that only account for 48% of the cultivation area of the winter-spring crop, or 208,000 hectares. Meanwhile, what farmers are seeking is outlets for the low-grade paddy IR 50404, making up 52% of the cultivation area.
Regardless of the warnings of the scientists and the management agencies, farmers have rushed to grow the low-grade paddy IR 50404 since the paddy was well-consumed in last year’s rice crop.