The State Bank of Viet Nam (SBV) has directed commercial banks to prepare funds in a move to timely meet capital demands of rice exporters as regulated in Decree 107/2018/ND-CP on rice export operations.

Under a document released this week, SBV required the banks to implement Decree 107, which has taken effect since October 1 this year, to lend to rice traders for constructing warehouses, milling and grinding establishments, rice and paddy processing establishments as well as farmers producing rice for export.

In case prices of rice and paddy drop to a lower level than the Ministry of Finance’s reference price and cause losses for farmers, banks are required to take detailed measures to regulate the market in a move to minimise farmers’ losses according to instructions by the Prime Minister and guidance of the SBV in each period, the SBV’s document notes.

Decree 107/2018/ND-CP, which replaced Decree 109/2010/ND-CP, is aimed at removing difficulties and legal barriers for rice businesses to expand into foreign markets.

Under the new decree, rice-exporting businesses will no longer be required to own rice storage, paddy milling and grinding facilities with processing capacities of 5,000 tonnes of rice and 10 tonnes of paddy per hour, respectively.

According to the Ministry of Agriculture and Rural Development, Viet Nam shipped nearly 5 million tonnes of rice abroad in the first nine months of this year, earning US$2.5 billion, up 8.5 per cent in volume and 23.2 per cent in value year-on-year.

China remained the largest importer of Vietnamese rice, accounting for 23.2 per cent of the total.

The price of the grain during January-August was averaged at $504 per tonne, a year-on-year rise of 14.6 per cent. Markets posting surges in the price included Indonesia, Iraq, the Philippines and Malaysia.

Analysts predicted that the domestic rice market would thrive in the fourth quarter of this year thanks to increasing demand from such importers as the Philippines, the Republic of Korea, Nigeria and Egypt. — VNS