Rice prices in the Mekong Delta had increased slightly after the government approved the purchase of one million tonnes for a national temporary reserve last weekend.

Early last week, the price for winter-spring rice remained high, but then it suddenly fell, partly due to competitive pressure from Thai rice.

Farmers like Le Van Tam were surprised by the sudden plunge in price.

Tam had planted 8,000sq.m of rice this year, yielding nearly eight tonnes. He was paid 4,700-4,800 VND per kg on March 9 but due to a late harvest of five days, the price fell to 4,200 VND per kg.

Tam said he then began to store rice at home, waiting for a higher price.

Traders also stopped doing business as prices declined sharply. Many of them were even willing to lose deposits that farmers had put down for advance purchases.

"Rice-export companies buy rice through traders. I had deposited money to buy 50ha in Thoi Lai district in the Mekong Delta city of Can Tho at a price of 4,600 VND. But the price fell, and I felt somewhat lost," trader Nguyen Van Tuong said.

"This is the first time ever that the price for winter-spring rice has unexpectedly dropped to such as low level," said Duong Quoc Nieu, a warehouse owner at the 21st rice port in An Nong commune, Tinh Bien district.

According to figures from the Vietnam Food Association (VFA), in mid-February, Thailand sold 600,000 tonnes of rice and another 800,000 tonnes in March.

The Thai Government also plans to sell 1 million tonnes per month and Thai farmers another 5 million tonnes by the end of March.

"Thailand's rice export price is expected to fall, and this will affect Vietnamese rice exports," said a VFA representative.

Meanwhile, demand from international rice importers has not been high as they are waiting for the expected lower prices.

However, after the Vietnamese government decided to buy one million tonnes of rice last weekend, farmers and traders resumed business as prices inched up.

Since early this year, the five biggest rice exporters in the world, including Thailand, India, Vietnam, Pakistan and the US, have sold only 4.1 million tonnes, a fall of 7.2 percent compared to the same period last year.

According to the Ministry of Agriculture and Rural Development, this year's winter-spring rice crop will have a high yield and there will be great pressure to export.

Mekong Delta provinces this year have harvested 650,000 of a total of 1.6 million ha of rice, with total expected capacity of nearly 11 million tonnes, an increase of 34,000 tonnes compared to the same period last year.

By the end of February, VFA's members exported 638,000 tonnes for $275 million, a drop of 13.5 per cent in quantity and 16 per cent in value compared to 2013.-VNA