Vietnam said on Monday it will sell 100,000 tonnes of better-quality 15 percent broken rice to Cuba this year as part of a government deal originally for 425,000 tonnes of 25 percent broken rice. Vietnam maintains a close relationship with fellow communist Cuba, but the sale of the better quality grain is also part of a rice export strategy aimed at raising turnover to $1 billion this year from $941 million in 2004.
Cuba made the change recently to take the better quality grain as part of the deal which allows deferred payment in 540 days, an official of the Vietnam Food Association said.
"Shipment for this lot of 15 percent broken rice will take place later this year," the official told Reuters.
Vietnam, the world's second-largest rice exporter after Thailand, started shipping 25 percent broken rice to Cuba, a traditional buyer, in late 2004 and has been sending up to two vessels each month, the official said.
The deal for 100,000 tonnes of the 15 percent broken rice is worth around $25.8 million, based on an export quotation on Monday by the Vietnam Food Association of $258 per tonne, free on board Saigon Port, for spot shipment.
Quotations of the association are often $8 to $10 per tonne higher than the contract prices in Ho Chi Minh City, Vietnam's busiest grain trading and shipping market.
Hanoi-based state-run Vietnam Northern Food Corporation, the country's second-biggest rice exporter, is executing the Cuba deal.
Last October, the government said the contract for Cuba was interest free and ordered the state-run Export Support Fund to provide assistance for the shipper to get bank loans.
It was not immediately clear how much rice Cuba would take from Vietnam in 2005, but last year it contracted for 400,000 tonnes of Vietnamese rice, higher than its usual annual import of 250,000 tonnes to 300,000 tonnes from Vietnam. Cuba also imports 200,000 tonnes of rice a year from China.
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