Friday, 9 October 2009

Vietnam to lift limits on rice exports

Vietnam plans to remove its rice export quota system and make it more market-based, a senior official has said.

The government would reform the current rice export system and no longer set any limits on shipments, the Phap Luat Ho Chi Minh City newspaper reported Sunday, citing Bui Ba Bong, deputy minister of Agriculture and Rural Development.

Vietnam's export quota system has faced repeated criticism from provincial authorities and exporters, who've said they have been allowed to export smaller volumes than their capacities.

The rice export quota for this year was originally capped at 5.2 million tons. But last month Deputy Minister of Industry and Trade Do Huu Hao said Vietnam may boost shipments this year to 7 million tons.

Bong said the government would also stop asking exporters to purchase rice at prices that ensure profitability for farmers. Businesses only need to buy rice at market prices while the government would subsidize losses for farmers, he said.

He said to prepare for a market-based rice sector, farmers should improve the quality of their rice so that their produce fetches good prices.

Vietnam shipped 4.7 million tons of rice in the first eight months of the year, 43 percent more than a year earlier, according to preliminary estimates from the General Statistics Office.

Rice exports totaled 4.65 million tons last year and reached a record 5.17 million tons in 2005.

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