Wednesday, July 27, 2011

Vietnam rice demand lifts prices

Vietnam rice demand lifts prices

A woman sells rice at a street in Hanoi,Vietnam. The world's second largest exporter of the grain is set to sign supply deals with Malaysia and East Timor in the next five months. Picture: EPA
Wednesday, July 27, 2011
VIETNAM, the world's second-largest rice exporter after Thailand, is expected to sign deals for a combined 350,000 tonnes of the grain with Malaysia and East Timor between now and the end of the year, a state-run newspaper reported on Tuesday.!

New demand has emerged from Chinese buyers and Philippine private firms which have come to Vietnam to seek rice, the Vietnam Economic Times newspaper said, lifting prices this week.!

The contract with Malaysia would be 200,000 tonnes and the remaining 150,000 tonnes would be sold to East Timor, the newspaper said, after Vietnam has struck a major deal to sell 500,000 tonnes to Indonesia. !

The deals put Vietnam on track to reach a rice shipment record of between 7.0 million and 7.4 million tonnes of the grain this year, after exporting a record 6.83 million tonnes in 2010. !

Malaysia ranks third after Indonesia and the Philippines among the top Vietnamese rice buyers so far this year, having taken 310,000 tonnes in the first half, a surge of 71.43 per cent from a year ago, the agriculture ministry said.!

Vietnamese exporters have so far signed deals to export around 6 million tonnes of rice, including the latest deal with Indonesia's state procurement agency Bulog, the newspaper reported.!


Bulog and Vinafood 2, Vietnam's largest rice exporter, have agreed on a price of US$498 a tonne, free-on-board basis, for all the 500,000 tonnes of 15 per cent broken variety, a trader at a foreign company in Ho Chi Minh City told Reuters.!

Last week Vietnamese traders said the deal may have included the 5-per cent broken and 15-per cent broken grades for a total of 500,000 tonnes. !

The latest deal, plus demand from Chinese and Philippine buyers who have been seeking to buy directly from small firms in Vietnam's Mekong Delta food basket, has helped raised rice prices now at the peak of a major harvest, the newspaper said.!

China has emerged as one of Vietnam's top 10 rice buyers this year, having bought nearly 220,000 tonnes of the grain in the first half of this year, agriculture ministry data show. It did not buy from Vietnam in the first half of 2010.!

The Philippines, the world's biggest rice buyer in recent years, cut its rice imports to 860,000 tonnes this year from a record 2.45 million in 2010. !

Summer-autumn rice grade 2, used to process the 15-percent broken and 25-percent broken varieties, rose to 8,200-8,480 dong (39.9-41.2 US cents) per kg in the Delta province of An Giang yesterday, from 8,150-8,250 dong per kg last Friday, when the news broke on the deal with Indonesia.!

Meanwhile, Thailand may release some of its rice stocks into the domestic market if it sees any shortage, a government official said yesterday, after speculators were reported to be hoarding grain, expecting prices to rise under an incoming government.!

"We have around 2 million tonnes of milled rice in stocks, ready to be sold at any time if there is any tightness in the domestic market. However, we don't see any shortage at this moment," said Anukul Tamprasit, president of the Public Warehouse Organisation (PWO). Reuters

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