Rice, seafood exports in Mekong Delta face tough market this year

Top officials have urged local authorities in the Mekong Delta to devise solutions to cope with long-term problems that could affect export and production of rice, catfish and shrimp this year.

“Authorities and localities should work together closely to cope with long-term problems and meet buyer demand,” said Deputy Prime Minister Hoang Trung Hai at a meeting held in Dong Thap Province yesterday. “Associations should also strengthen their role in the business community.”

The deputy PM noted that policies supporting agricultural exports must be carefully reviewed before implementation so that anti-dumping lawsuits and other negative consequences can be avoided.

He also urged the Mekong Delta provinces to establish a Tra Catfish Association.

At the meeting, authorities announced that 211,000 tonnes of the winter-spring rice in Mekong Delta provinces had been bought for temporary stockpiling since February 20.

This followed the Prime Minister’s decision to purchase one million tonnes, about 30 per cent of the total amount of paddy for sale in the region.

The activity has helped to slightly increase the price of rice, by around 5 per cent, in the provinces to VND4,400 (2.1 cents) per kg.

“Farmers and provincial leaders are pleased about this. It has helped to increase the export price by US$10 – 15 per tonne,” said Truong Thanh Phong, chairman of the Viet Nam Food Association (VFA).

Under the decision, the Government will cover 100 per cent of interest rate on loans for businesses to buy rice from February 20 to March 31.

At least 119 companies have been chosen to join the programme.

In addition, 12 commercial banks have provided VND11.5 trillion ($550 million) with an interest rate of 11 per cent per year.

Last year, banks provided a total of VND72 trillion ($3.4 billion), a year-on-year increase of 1.42 per cent, for the rice stockpile.

This year, Viet Nam plans to export 7.5 – 8 million tonnes of rice. The country already has contracts for 3.5 million tonnes.

Thailand, which is one of Viet Nam’s chief competitors, plans to have 16 million tonnes of rice in storage.

In Viet Nam, rice has been exported at a price of $446 per tonne, a decrease of 8 per cent compared to the year before.

In the coming time, the Mekong Delta will develop large rice-field models, expanding the current 72,000 ha in 13 provinces up to 1 million ha with higher profits of VND2.2 – 7.5 million ($100 – 360) per ha.

At the meeting, industry officials discussed the status of seafood production and sales in the region, saying that this would be a tough year for tra catfish exports because the EU, a major market, remains in economic crisis.

The Ministry of Trade and Industry expects that turnover of tra exports will total $1.2 – 1.5 billion.

“Farmers have had difficulty with loans because they do not have any assets and the term for borrowing is around four months, while they need eight months to feed tra catfish,” said Vu Van Tam, deputy minister of the Ministry of Agriculture and Rural Development.

In 2012, shrimp exports fell 6.6 per cent, compared to 2011.

Viet Nam is expected to have turnover of between $2.15 billion and $2.2 billion for shrimp exports this year..

Other problems loom. This year, shrimp exports are faced with anti-dumping lawsuits from the US. Technical barriers from Japan and South Korea have also prevented the use of ethoxyquin, a quinoline-based antioxidant used as a food preservative and pesticide.

Viet Nam is expected to have turnover of between $2.15 billion and $2.2 billion for shrimp exports this year.

The Ministry of Trade and Industry said that turnover would range from $5.6 billion (a drop of 8.7 per cent) to $6.4 billion (an increase of 4.3 per cent), in comparison with 2012.

“The Government should invest in an information technology system for the Ministry of Agriculture and Rural Development to manage seed and feed and veterinary medicine. This would limit risksin production,” said Truong Dinh Hoe, general secretary of the Viet Nam Association of Seafood Exporters and Producers.

He also noted that the Government should issue policies on exports to China as the quantity of high-quality seafood exports to that market had significantly increased recently.

“We must also resolve the shrimp anti-dumping lawsuit with the US. If we don’t do this properly, another lawsuit will be filed against tra catfish and other seafood exports,” he said.

Lee Minh Quang, chairman of Dong Thap Province, asked the Government to use time, quantity and floor price as the criteria for implementation of the stockpiling programme.

“Dong Thap is an upstream province of the Mekong River, and we need to buy rice much earlier than other neighbouring provinces,” he said.

Quang also suggested that the stockpiling programme be maintained, but that it should eventually help enterprises invest in expansion of rice-field production.

More than 130 representatives from 13 Mekong Delta provinces, ministries and banks took part in the meeting.