Vietnam rice prices firmer

New buying demand and a thinning stock in Vietnam, the world's second-largest rice exporter, have firmed prices by about 4.5 percent in the past two weeks and they should remain there until year end, traders said on Wednesday.
"There is a problem with the supplies as warehouses have almost run out of stocks in the period between crop now," said a trader in Ho Chi Minh City, Vietnam's busiest grain trading centre.
"Exporters have signed up a number of contracts recently that have caused prices to firm by about $10 a tonne in the past two weeks," he added. Africa, Iran and regional destinations such as Malaysia are among the recent Vietnamese rice buyers.
The Vietnam Food Association has estimated Vietnam will export 3.9 million tonnes of rice this year, from 3.82 million tonnes shipped last year. Contracts signed so far have totalled 3.7 million tonnes, of which 3.5 million tonnes had been loaded.
Traders said even though the association has reaffirmed a stock of 600,000 tonnes reserved for shipments next year, it was impossible to sign forward contracts at present given the rising price trend.
Export quotations for five-percent broken rice have firmed to $225 to $230 a tonne, free-on-board (FOB) Saigon Port, from $215 to $220 last week. The 25-percent broken grain also rose to $213 and $216 a tonne, FOB basis, from $203 to $205 last week.
In the Mekong Delta rice basket, paddy prices increased to 2,200 dong (14 cents) per kg this week from a range of 1,900 dong and 2,000 dong in the past two weeks. Farmers in the delta finished in late August harvesting the summer-autumn crop, for both domestic consumption and export.
"If there is a forward contract, only the government can handle it," said the second trader.
This week the government said it has agreed to sell 200,000 tonnes of rice to traditional buyer Cuba, with shipment starting in 2005 and an interest-free deferred payment for 18 months.
The food association said Cuba often takes the 15 and 25 percent broken varieties from Vietnam. The deal would be worth around $43 million at this week's market value, if Cuba takes all the 25-percent broken grain.