The Vietnam Food Association is seeking government approval to enlarge its rice stockpile by another 300,000 tons to keep prices stable after Thailand cut export prices of the grain.
In a recent note to Prime Minister Nguyen Tan Dung, the VFA has proposed that its rice businesses be permitted to buy from September 15 to October 15.
It also sought interest subsidy on bank loans for two months for the businesses making the purchase.
Besides, it wants the government to subsidize the interest for one more month for loans its member-companies used to buy one million tons of rice from June to August.
It said this would mean the firms do not have to sell off their stocks to pay the interest after the government's support ends this month.
Thailand last month slashed the price of its 100% B rice from US$420 to $380 per ton, equal to similar grade of Vietnamese rice, to reduce its bulging stockpiles.
It now has stocks of around 17 million tons, Reuters reported Tuesday.
Earlier this year the Vietnamese government allowed rice companies to buy and stockpile two million tons from the winter-spring and summer-autumn crops.
Their stocks now stand at 700,000 800,000 tons, VFA chairman Truong Thanh Phong said.
But the companies are suffering a loss of around $30 per ton since paddy and rice prices in the Mekong Delta, Vietnam's largest producer, are falling.
The VFA urged rice businesses to explore new markets like Africa and sell more to traditional markets such as China and the Philippines because of the strong competition from Thailand.
Vietnam hopes to export 7.5 million tons of rice this year. It has shipped 4.58 million tons valued at $1.96 billion in the first eight months, according to the VFA.