Employees of a Tien Giang-based company seal rice packages. Domestic rice traders have so far purchased a million tonnes of rice. — VNA/VNS Photo Dinh Hue

HA NOI (Biz Hub)— Rice trading enterprises have already purchased 1 million tonnes of rice under the Viet Nam Food Association (VFA)'s plan, said an official from the VFA.

The association chairman Truong Thanh Phong said that by August 15, 114 member enterprises of the association had met a target of buying 1 million tonnes of rice under the Government programme on purchasing produce.

The June 15 - August 15 plan aims to ensure rice farmers, who have been harvesting their rice crop, make a profit from the current summer-autumn season.

Assigned by the Viet Nam Food Association, 114 eligible enterprises have joined the programme with a targeted amount of rice to be bought in each province.

In the Mekong Delta, Long An Province had a target of 91,000 tonnes, Kien Giang 85,000 tonnes and Bac Lieu and Hau Giang 10,000-15,000 tonnes.

Deputy minister of agriculture and rural development Vu Van Tam said not all farmers gained a 30 per cent profit from the programme this year due to varying production conditions and export prices across different regions.

The current economic downturn also made rice exports less profitable, said Tam.

In 2012, the price of unhusked rice jumped by VND200-300 per kilo for those harvested from the winter-spring crop and by VND400-500 per kilo for those harvested from the summer-autumn crop under the Government programme.

"This resulted in farmers gaining a 30 per cent profit," said Vo Thanh Do, deputy head of the Ministry of Agriculture and Rural Development's Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production.

But, this year, if the Government purchasing programme was halted, the price of unhusked rice would fall further and farmers would be the first to suffer losses as the economic downturn has created disadvantages for rice trading, Do said.

The association said prices for unhusked rice from the summer-autumn crop increased by VND1,000 per kilo to VND4,700-5,300 during the rice purchasing period.

Phong said the after the rice purchasing period, the price would reduce slightly by the end this year as demand for rice at border gates with China and Cambodia increases.

In the first seven months this year, Viet Nam exported 4.22 million tonnes, earning US$1.88 billion, the association said. The exports declined year-on-year by 11.3 per cent in volume and 13 per cent in value.

The association expected Viet Nam to export 2.07 million tonnes in the third quarter and 2 million tonnes in the last quarter.

In total, the nation is set to export about 7.5 million tonnes for this whole year. — VNS