Prices of un-husked rice and polished rice have surged sharply in the Mekong Delta but farmers have failed to benefit from the price hike as they are currently out of stock of un-husked rice.

Only traders are enjoying the present price hike as they have stockpiles of rice.

The price of commercial un-husked rice has fluctuated between VND6,000 and VND6,500 per kilogram, whereas polished rice has gone up from VND7,850-8,000 per kilogram since early May, towards the end of the winter-spring crop.

Over a month ago, Mekong Delta farmers sold their un-husked rice during the harvest season at an average price of VND4,800-5,000 per kilogram, losing a profit of about VND7-8 million per hectare.

Nguyen Trung Dau, a farmer from Long Binh Commune in Long My District of Hau Giang Province, said he sold un-husked rice just 40 days ago at only VND4,500 per kilogram. Now, the price is VND6, 000 per kilogram, so he has missed a profit of VND1,500 per kilogram.

He is regretful and wished he had a large warehouse to store the un-husked rice to sell later.

Dien Van Banh, a farmer from Phuong Binh Commune in Phung Hiep District of the province said he sold nearly six tons of un-husked rice at VND5,000 per kilogram a month ago and missed a profit of nearly VND6 million when the price increased to VND6,000 per kilogram.

Farmer Banh said he really wanted to keep his un-husked rice and wait until the price rose higher but he was compelled to sell to pay his debts and meet his family expenses.

About 45 days ago, at peak harvest time, un-husked rice prices suddenly dropped to VND5,000 per kilogram. The Hau Giang Province Peoples’ Committee asked the Government to take measures to prevent the price drop, to help farmers earn a profit.

According to the province, the cost price of un-husked rice was about VND3,700-3,800 so at a selling price of VND5,000 per kilogram, farmers were unable to profit by 30 percent.

For farmers, the winter-spring crop is the major production crop of the year which produces a yield of over 10 million tons of un-husked rice, of which six million tons is commercial un-husked rice.

Who profits?

Farmers have complained about the discrepancy in pricing of export rice by the Vietnam Food Association (VFA), which benefits only rice exporters and merchants.

They say that while harvesting the winter-spring crop in mid March, the VFA lowered the export price of rice twice.

The first was on March 9, when the price dropped by US$10-20 per ton and the second was on March 17, when the price dropped a further US$20 per ton.

As a result, prices of domestic un-husked rice and polished rice dropped sharply, with un-husked rice prices going down to VND5,000-6,000 from VND5,600-7,000 per kilogram.

An expert observing the paradox stated that while farmers were selling un-husked rice, exporters were buying rice. This meant that farmers have had to sell their un-husked rice to merchants, who then process rice to sell to exporters.

Over 90 percent of commercial un-husked rice has been sold to merchants.

Exporters usually buy rice when their export business is doing well and they are reaping profits. When export prices go down, they refuse to buy rice or else force farmers to reduce their prices.

Rice traders have good storage facilities and usually stockpile rice to sell when prices rise. Many are presently enjoying fat profits by buying un-husked rice at VND5,000 per kilogram and selling at VND6,000-6,500 per kilogram.

Rice company warehouses are fully stocked and hence have stopped buying un-husked rice from farmers.

Source: SGGP