Bank trims rate to coax millers
The state-owned bank entrusted with extending $27 million in emergency loans to millers to purchase rice paddy has marginally lowered the interest rate on these conditional loans in an effort to shorten some of the strings attached. The Rural Development Bank announced late on September 25 that it would lower the annual interest rate on loans to rice millers to 7 percent, from 8 percent. Kao Thach, the bank’s CEO, said on September 26 that the revised interest rate aimed at helping farmers get more revenue from the sale of paddy rice by encouraging millers to accept a floor price. Under the terms of the lending package announced last week, millers who accept the loans are required to purchase paddy rice from farmers at $210 per tonne at the farm gate or $225 per tonne at their warehouse. The package’s announcement came after the farm-gate price of paddy rice fell precipitously from $240 per tonne in August to $192 per tonne earlier this month.
