Since mid-January, rice prices have dropped to 7,300-7,800 VND/kg, but they are still higher compared to previous seasons, and farmers are still making a profit of about 60%, based on a production cost price of approximately 4,000 VND/kg, as reported by the Financial Association.

This information was provided by Mrs. Bùi Thị Thanh Tâm, Chairman of the Board of Directors of Northern Food Corporation (Vinafood 1), at the Government’s New Year meeting with exemplary state-owned enterprises on March 3.

According to Chairman Tâm, from mid-January to now, rice prices have decreased by about 30%, and businesses and importers have been delaying purchases to wait for lower prices. Rice prices surged continuously during Q3-Q4 2023 due to India's export ban, with prices dropping from above 9,000 VND/kg to 7,300-7,800 VND/kg. Despite the drop, prices are still higher than during the Winter-Spring crop of 2023 and higher than previous seasons.

"With current rice prices, farmers are still making about 60% profit based on the production cost price announced by the Financial Association, approximately 4,000 VND/kg, and despite the significant reduction from the high prices," Tâm confirmed.

The Vinafood 1 leader also pointed out that the recent drop in rice prices is due to the ongoing harvest season, with all fields being harvested at the same time, leading to congestion from the fields, mills, and even domestic ports.

Moreover, countries like Thailand, the Philippines, and Indonesia are also in their harvest season from March to May. Some rice-consuming countries, such as those in Africa and the Philippines, are holding large stocks and will prioritize domestic consumption before importing more.

According to Tâm, Vinafood 1 has made offers to some importers, but they have responded that they will "consider further and may negotiate later." Global market prices are currently adjusting. Vietnam only accounts for 15-18% of the world’s total rice exports.

Good news in January: Vietnam participated in a bidding process in Indonesia for a very large quantity, with a total bid of 500,000 tons, but Vietnamese exporters won nearly 400,000 tons at a high price.

With the current prices, the report to the Prime Minister reassures that farmers are making a profit and are very optimistic, and with these prices, farmers are likely to continue increasing production.

Looking ahead, the Government and relevant ministries forecast a high demand for rice in 2024, and importers are still planning to proceed.

The company continues to buy rice

Mrs. Bùi Thị Thanh Tâm mentioned that, following the Prime Minister’s directives and the State Capital Management Committee’s instructions, the company has continuously bought rice and has currently purchased about half a million tons. The company will continue purchasing in the coming time. Additionally, private company warehouses are also continuing to buy rice.

To enhance production and ensure domestic and export food security, Vinafood 1 has proposed to the General Department of State Reserves and the Ministry of Finance to implement the annual rice reserve purchase program early. This is essential for businesses to have contracts to implement and ensure warehouse quality.

This year has posed many challenges, so the company hopes that the State Bank of Vietnam (SBV) and commercial banks will continue to pay attention, reduce interest rates, and relax lending conditions for rice export and processing companies.

Regarding the sustainable development project for 1 million hectares of high-quality rice cultivation, which is significant both domestically and internationally, Vinafood 1 proposes that the Government assign ministries, sectors, and provinces to implement the project and review the previous large-scale field programs. When organizing the conference, it is suggested that ministries invite the business community to participate.

Source: Vietstock