Vietnam rice: Manila demand, thin supply firm prices

Current ship loading for Manila and news of a planned Philippine rice tender have firmed prices in Vietnam, traders said on Wednesday. They said prices should ease late this month when supplies arrived from the new harvest. Vietnam is the world's second-largest rice exporter, after Thailand. Last month it won contracts to supply 400,000 tonnes of 25 percent broken rice to the Philippines, one of its key buyers.
Manila has said it will seek tenders on March 1 to buy 500,000 tonnes of the grain for delivery in April and May to fill a projected shortfall of up to 1.6 million tonnes this year.
"The news of these tenders has raised local prices and made farmers hold back on their stock," said a foreign trader in Ho Chi Minh City. "Farmers notice that vessels are coming in for loading, so they have another good reason to hold out for higher prices."
Last week 10 vessels completed loading a combined 69,600 tonnes of rice at Vietnam's main port, Saigon. Eight of them were destined for Manila.
Three of six vessels loading this week are also bound for the Philippines.
Other destinations for this week's ship movements are Russia, Cuba and Africa.
Prices in the Mekong Delta rice basket firmed to 2,600 dong (16.4 cent) per kg of paddy from 2,300 dong to 2,500 dong last week.
The early grain from the winter-spring crop, Vietnam's best quality crop, could be sold at 2,900 dong per kg, a record at the start of the harvest in the past several years, traders said.
The winter-spring crop harvest would peak early next month.
Export offers for the 5 percent broken rice were now stable at $265 per tonne, free-on-board Saigon Port basis, from $260 to $265 last week. The 25 percent broken grain was also stable at $248 to $249 a tonne, FOB basis, from $247 to $250 last week.
"Prices will not rise higher as they are at their peak now but they will stay high for a while as long as farmers see more ships arriving," said another grain trader.
"We hope prices will ease after Tet, and foreign buyers may start buying," he added. The Tet festival runs between February 8 and February 13.
Vietnam exported an estimated 250,000 tonnes of rice last month, up 131.5 percent on a year earlier, government statistics show.