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National rice reserves don’t greatly affect rice prices   2009-06-11 - VietNamNet/NLD

National rice reserves do not have big impacts on the prices of rice exports, and the impacts are largely positive, said Duong Thanh Trung, Deputy Head of the National Reserve Bureau.


Do the rice reserves, which aim to ensure national food security, affect rice prices and rice exports?


In theory, the activities of purchasing and selling rice that serves the national reserves lead to demand and supply increases which do, to some extent, affect market prices. However, these are good impacts.


It is because when the rice price is low, the Government will instruct the National Reserve Bureau to buy rice at high prices to ensure profit for farmers. Meanwhile, when the price is overly high, it will sell rice at below market price in order force the price down.


Some people say that due to inaccurate statistics, we have maintained overly high reserves, while we dared not export rice when the prices were high, all of which have caused losses. What would you say about that?


There are three kinds of reserves, reserves among people, reserves in circulation and national reserves.


The state cannot calculate the reserves among people. Meanwhile, the reserves in circulation are being seen to by the Southern and Northern Food Corporations under a specific regime, estimated at 1 million tonnes. The national reserves can be used only in emergency cases when the Prime Minister himself instructs.


The rice reserves are now at four kilogrammes per head per annum and we are striving to raise the level to five kilogrammes.


Which agencies do you think are responsible for rice prices and exports?


Many government agencies are involved in food security, while the function of the national reserve bureau is to give food aid or give support to other countries if necessary. The national reserves are being managed by the Prime Minister himself, while rice exports are decided by the National Assembly.


Most recently, the Prime Minister instructed the two food corporations to enlarge storage areas this year for storing one million tonnes of paddies. The national reserve bureau has been instructed to purchase 100,000 tonnes of rice more. As such, this may make the market price move up, but just several tens of dong per kilogramme.


While Deputy Prime Minister Hoang Trung Hai has instructed the Vietnam Food Association to urgently change the way it manages rice exports and stop allocating export quotas, in the Cuu Long River Delta, many enterprises still dare not collect rice to store.


Tran Bao Toan, Director of Thanh Lich Enterprise in Dong Thap province, said that the rice purchase price is now just 5,100 dong per kilogramme, at which price farmers are incurring losses.


Toan also predicted that the rice price will continue decreasing as no enterprise dares purchase rice to store. He said that his company is allowed to export 5,000 tonnes of rice this year only, and since his quota has run out, he dares not collect more rice.

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