The Vietnam Food Association (VFA) has cooperated with relevant agencies to step up purchase of rice from farmers and implement a price insurance program to prevent market prices from dropping further.
The association said it will buy rice at the minimum price of VND4,000 (21 US cents) per kilogram to make sure that farmers will make a profit of at least 40 percent from the winter-spring crop.
Prices of unhusked rice have begun to fall in the Mekong Delta region after the Tet (Lunar New Year) due to difficulties in rice export.
While importers previously bought rice in large quantities to maintain sufficient reserves, they were buying the grain in smaller quantities this year, experts say.
VFA, however, said the country’s rice export market has many advantages in 2010 since many rice producing countries have seen declines in rice production due to bad weather while global demand for rice remains high.
Local rice exporters should abide by prices suggested by VFA when signing export contracts and shouldn’t reduce them since rice importers have begun to speculate on prices, the association said.
If there is good management and a reasonable rice reserves mechanism, export prices will go up, the association said.
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