Vietnam sells 120,000 tons of rice to Philippines

Vietnam has recently signed contracts to sell a total of 120,000 tonnes of rice to private companies in the Philippines, helping push up export prices by around 10 percent in recent weeks, traders said on Friday. Securing the Philippines contracts will come as a relief to the world's second-largest exporter of the grain after a long period without major contracts, but higher export prices could mean loss of new deals to rivals such as Thailand and Pakistan.
Half of the volume was the 5 percent broken rice, while the 15-broken and 25-broken grades made up the rest in the deals struck by Vinafood 2, Vietnam's largest rice exporter, three traders at foreign firms in Ho Chi Minh City said. Loading will begin next month, one trader said.
Officials at Ho Chi Minh City-based Vinafood 2 could not be reached immediately for comment. The 5 percent broken rice was quoted this week at $400 to $405 a tonne, free-on-board (FOB) Saigon Port, up around 10 percent from the start of this month. "Buyers can opt to take rice from Thailand or Pakistan," a second trader said, noting that Thai 5 percent broken grain was quoted at $410 a tonne, FOB basis. "When the gap is less than $20 a tonne, buying Thai rice is better," he said.
The jump in Vietnamese rice prices in recent weeks is also due to demand from China, traders said. Rice has been shipped from the southern region incorporating the Mekong Delta food basket to Vietnam's port city of Haiphong in the north and moved further on to China. China, Vietnam's biggest rice buyer so far this year, has bought some 1.2 million tonnes of the grain via border trade, the official Vietnam Economic Times said on Friday, citing Vietnam Food Association data.
Vietnam could export less than 7 million tonnes of rice this year due to market difficulties, below its revised target of shipping between 7.1 million and 7.2 million tonnes, the newspaper quoted the association's chairman Truong Thanh Phong as saying. "Sales to China via border trade can affect Vietnam's rice export management because the authority does not know how much rice has gone to China," a trader said, adding that rice exports via border trade were not included in the country's statistics. Based on Vietnam government data, China has imported 1.62 million tonnes of rice in the first eight months of 2013 from the Southeast Asian nation, up 3.2 percent from the same period last year.