Paddy prices in Vietnam may ease by the end of this month as the ongoing crop harvest accelerates toward its peak, but prices would rise next month if Vietnamese exporters win a rice tender in Manila, traders said on Wednesday. They said harvesting of the winter-spring rice crop in the Mekong Delta rice basket, which has been under way since this month, has made fresh grain available for spot shipment but foreign buyers have yet to rush in to buy.
"They expected prices to soften by the end of this month, but if Vietnam wins the tender, prices will be up," said a trader at a foreign firm in Ho Chi Minh City, the grain-trading centre in the world's second-largest rice export nation after Thailand.
Prices in the Mekong delta have fell to between 2,400 dong and 2,500 dong (15.2 cent to 15.9 cent) per kg of paddy, from 2,400 dong to 2,700 dong last week.
The 5 percent broken rice eased to $263 to $265 a tonne, free on board Saigon Port, from $265 early this month. But the lower quality 25 percent broken rice firmed to $250 to $252 a tonne, FOB basis, from $248 to $249 two weeks ago after Vietnam won contracts to sell 400,000 tonnes of the variety to the Philippines.
Manila has said it will seek tenders on March 1 to buy another 500,000 tonnes for deliveries in April and May to fill a projected shortfall of up to 1.6 million tonnes this year.
Vietnam will send nine bidders to Manila, including Vinafood 2, its largest rice exporter, said the Vietnam Food Association.
She said Pakistan was expected to bid for 50,000 tonnes. Manila was also seeking to buy up to 100,000 tonnes of iron-fortified rice, which Vietnam does not produce.
Traders said it would be tough for Vietnam to compete with Thailand if the Thai government joins the March tender, because Thailand has stockpiled grain that can be offered at very competitive prices. "If Vietnam wins, prices will rise, if not it will be difficult to predict export prices next month," said another Vietnam-based trader.
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