Rice trading in Vietnam, the world's second-largest exporter of the grain, has slowly resumed in the past week as buyers await details on the new export policy while sellers struggle with a local price floor, traders said.
On Tuesday the Vietnam Food Association said exporters based in the Mekong Delta rice basket were allowed to ship the grain if their contract prices were above the floor prices it set.
Traders said the association set the floor for 5 percent broken grade rice at $225 a tonne, free on board Saigon Port basis; the 10 percent broken grade at $222; the 15 percent broken at $217 and the 25 percent broken variety at $214.
Bids for the 5 and the 25 percent broken rice were at $2 to $4 a tonne below the floor, but traders said the association, in charge of licensing export contracts, would reject any prices that were lower.
Vietnam, which competes with the world's top rice exporter Thailand, halted new deals in late July after exporters had signed up for the entire 3.5 million tonne limit for this year. As harvest of the summer-autumn rice crop ended last month in the Mekong Delta before seasonal floods arrived, the agriculture ministry has sought government approval to raise the limit to 3.8 million tonnes, given the delta's plentiful stockpile.
The Trade Ministry submitted a similar proposal to the government this week, trade sources said. But on Tuesday a senior ministry official told Reuters it was unclear if a new export target was to be issued this month. Traders said the new limit was expected to be announced on September 20. They have said new demand for Vietnamese rice would come from African countries, the Philippines, Iraq and Malaysia.
Vietnamese exporters are this week lowering their offer prices because prices in the Mekong Delta for unhooked rice have eased in the wake of the government's curbs on exports. Paddy prices stand at around 2,000 dong (12.7 cent) per kg in the Delta's key growing province of An Giang, from 2,100 dong to 2,200 dong last month.
Rice mills there have all run out of storage capacity, traders said. A trader said an offer for the 25 percent broken rice was put at $207 a tonne, which made the grain attractive, compared with $226 to $227 a tonne for Thai grain of the same broken grade. "But the (food) association would not allow that price so mainly exporters are just working on loading for previous contracts," he said. Seven vessels are loading 88,200 tonnes at Saigon Port this week for the Philippines, Cuba and Africa.