The Vietnam Food Association (VFA) will suggest the government raise initial rice export prices to be taxed or remove the rice export tax to help ease local farmers’ difficulties, the Youth reported, citing an official from the association.
Truong Thanh Phong, chairman of the VFA, said the government should impose export tax on rice selling for above US$800 a ton instead of current US$600.
Phong said the time the government to levy tax on rice export is not appropriate, adding that rice export prices have dropped while rice production costs are sharply rising.
The chairman noted that farmers are the hardest hit people by rice export tax.
“Local companies are now not keen on buying paddy and rice from the farmers for fear losses because rice export prices have been falling.” Phong said, adding that they are also waiting for the government’s introductions on rice export tax.
“Local farmers are now very upset as paddy has been piled up but a few buys it,” he added.
Currently, paddy prices stay at very low level in Mekong Delta region, averaging at VND4,200-VND4,300 a kilo. Phong said with paddy production prices hitting VND3,500 a kilo, the selling paddy prices should be VND5,000 a kilo at least.
Export prices of Vietnamese rice are now US$620-US$630 a ton of 5 per cent broken rice, down by 14.5 per cent from the floor export price set by the VFA a week earlier.
The Vietnamese government decided to impose tax on rice export, ranging from VND500,000 to VND2.9 million for rice selling for from US$600 to US$1,300 a ton, free of board.
Vietnamese companies have signed contracts to export 3.4 million tons of rice for the first three quarters of 2009, around 100,000 tons lower than target set by the government.
Vietnam raked in US$1.81 billion from exporting 2.79 million tons of rice in the first seven months of 2008, but had to spend US$1.1 billion on importing 2.32 million tons of fertilizers, and US$323 million on pesticide imports, according to the General Statistics Office (GSO).
Rice export revenues increased by 87.6 per cent against the same period of last year, but fertilizer import turnover rose by 118.9 per cent, the GSO said. (The Youth, GSO July Edition)
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