Traders compete to buy young rice seedlings

Anticipating that raw rice prices in the West will continue to increase or remain high, many traders are competing to buy young summer-autumn rice seedlings from farmers who have just planted them a few days ago.

In Can Tho, Bac Lieu, and Soc Trang, low-quality IR50404 raw rice is purchased by traders at the field at VND5,200-5,300 per kilogram; high-quality rice is VND5,800-6,000 per kilogram. This price is VND800-1,000 per kilogram higher than before Tet and is the highest in the past 3 years.

Mr. Nguyen Van Nam in Tan Hong district, Dong Thap province said that with the current high rice price, after deducting expenses, farmers make a profit of 2,000-2,500 VND per kilogram.

Currently, there is not much rice left in the fields in the upstream localities such as An Giang, Dong Thap, Can Tho, traders flock to Hau Giang, Soc Trang, Bac Lieu, Tra Vinh to collect raw rice at high prices from the people. Farmer Le Van Thanh in Phong Thanh commune, Cau Ke district, Tra Vinh province has just harvested 5 tons of rice, sold it all to traders at 5,200 VND per kg, earning a profit of nearly 3 million VND per hectare (1,000m2).

"Although the yield is a bit low due to the drought, the selling price is high, making people here very happy," said Mr. Thanh, adding that, in addition to the majority of people who sold their rice after the harvest, many people continue to keep it waiting for the price to increase further.

Notably, not only rice farmers but also traders believe that rice prices will continue to increase or remain high. Many people are looking for good land with guaranteed irrigation water to negotiate to buy young summer-autumn rice from farmers who have only sown it for a few days at a fairly high price.

Western rice is so expensive that many traders have placed deposits to buy even young rice.

Mr. Nguyen Van Kien, a large rice trader in Chau Thanh A district, Hau Giang province, said: “I have bought more than 200 hectares of young rice from local farmers at VND4,500-4,600 per kilogram of IR50404; high-quality rice is VND4,800-4,900. Farmers agreed to sell, I paid 30-50% in advance, bought all the rice, and will harvest at the end of April.”

Farmer Tran Van That in Truong Long A commune, Chau Thanh A district, has just planted 20 hectares of summer-autumn rice 3 weeks ago and said that many traders have come to ask to buy.

“Because I needed money, I agreed to sell unripe rice at 4,800 VND per kilogram, taking 50% in advance and the rest when harvesting. Traders are paying a high price for fresh rice weighed in the field. It is not certain that the price will be as high as it is now,” Mr. That said.

Mr. Le Hai Minh, a trader specializing in purchasing rice in the three localities of Can Tho, Vinh Long and Hau Giang, confirmed that even young rice is difficult to buy because people are waiting for the price to increase further or have to compete with many other traders with stronger capital. Faced with this situation, many rice brokers have borrowed money to buy young rice from people in the hope of making a big profit.

Mr. Nguyen Van Dong, Director of the Department of Agriculture and Rural Development of Hau Giang province, said that the reason for the price increase is that many countries in the region have been severely affected by the El Nino phenomenon, many areas have had to switch to other crops, leading to a decrease in rice output. Because Hau Giang and other localities in the region still have a large area of ​​rice, they have an advantage. In particular, thanks to the promotion of science and technology transfer, the cost of rice production of Hau Giang farmers is only 2,800 VND per kg, so they earn more profit when the selling price is high.

In addition to the reasons given by Mr. Dong, the reason for the sharp increase in rice prices is also due to the sharp decline in rice output due to the impact of drought and salinity. According to statistics from the Ministry of Agriculture and Rural Development, the total damaged rice area from the end of 2015 to now is nearly 139,000 hectares and it is expected that about 46,000 hectares will be affected by drought and salinity. In addition, the Mekong Delta will have about 500,000 hectares that will not be planted on time. Faced with this information, many people have the mentality of hoarding rice and waiting for higher prices to sell.

Mr. Nguyen Thanh Phong, Director of Van Loi Food Company (Tien Giang) also gave another reason partly due to the fierce competition between official and unofficial exports. "When official export enterprises need to buy rice to continue implementing signed contracts, a source of goods is purchased and sent to the North, causing prices to increase," said Mr. Phong.

Mr. Nguyen Trung Kien, Chairman of the Board of Directors of Gentraco Joint Stock Company, said: “Rice prices are very high. Currently, the company only buys a small quantity, about 200 tons per day, because there is no output. With the current input price, we are forced to increase the export price, but when we increase it, we cannot sign a contract.”

According to the Vietnam Food Association (VFA), it is expected that in the first quarter of 2016, Vietnam will export 3.1 million tons of rice (not including unofficial sales across the border).

According to VNE