A plan to purchase one million tons of rice for temporary storage will begin after the Lunar New Year holiday, said Truong Thanh Phong, chairman of the Vietnam Food Association (VFA).

He said the Prime Minister had given the nod to the plan for buying one million tons of the winder-spring rice for stockpiling. The plan is scheduled to start on February 20.

The approved volume is half a million tons lower than that suggested by VFA to the Ministry of Agriculture and Rural Development.

VFA members will buy rice for temporary storage. They may not be offered preferential lending rates like in previous years, said Phong.

In the last two days, paddy prices in the Mekong Delta rose slightly by VND200-300 per kilo as enterprises began buying. However, export is always quiet in the early months and not until April will export orders pick up with the demand from Malaysia and China, according to VFA.

To prepare for the rice storage, the Ministry of Finance on Monday announced the paddy production costs in the Mekong Delta provinces in the 2012-2013 winter-spring crop. Specifically, the production cost is VND3,640 each kilo of paddy in An Giang, VND3,417 in Bac Lieu, VND3,280 in Ben Tre, VND4,160 in Dong Thap, VND4,474 in Hau Giang and VND3,289 in Kien Giang.

The average paddy production cost in the Mekong Delta is VND3,616 per kilo, according to the finance ministry. Authorities have repeatedly pledged to boost the paddy price to ensure a profit margin of 30% for farmers.

The Saigon Times Daily