Rice prices in Vietnam, the world's second-largest exporter of the grain, have edged up this week on fresh demand amid dwindling supplies, traders said on Wednesday. They said foreign buyers had been checking the Vietnam market this week, turned off by higher prices in Thailand, the world's top rice exporter.
"It is now near the end of the crop so supplies have thinned. Exporters raised their quotations also because of new inquiries from buyers who came here from Thailand," said a state exporter based in Ho Chi Minh City.
Traders said several new deals had been sealed recently. Last week, a European trading house bought 10,000 tonnes of 5 percent broken rice from a Vietnamese company for shipment to Africa starting from next month.
The rice was sold at $227 per tonne, free on board Saigon Port. This week, the same grade has firmed to $230 to $231 a tonne. The 25 percent broken rice edged up to $216 to $219, FOB Saigon Port, from $216 to $217 last weeks.
Offers for Thai 5 percent broken grade were quoted at $260 a tonne. Traders said they were monitoring the development of typhoon Mafia, which was forecast to bring rains to the southern area later on Wednesday while moving into the Gulf of Thailand.
"Rains could disrupt loading at the port," said a trader in Ho Chi Minh City. Five vessels are now loading 84,630 tonnes of rice at Saigon Port for Africa, Cuba and Malaysia. Three other vessels have completed loading 31,400 tonnes for Africa, Malaysia and Russia.
On the other hand, farmers in the central and southern provinces were expecting the storm to bring rains to the drought-stricken region. The official Vietnam News Agency reported that agriculture ministry officials met on Wednesday in the province of Binh Dinah to discuss measures to combat the drought.
They have advised rice farmers to switch to growing other crops. A report by the irrigation department estimated crop damage in the region at 580 billion dong ($36.8 million). State forecasters said the drought would last until February 2005.
Vietnam's outdated irrigation system is estimated to retain 25 billion cubic metres of water a year, compared with 840 billion cubic metres required by the country each year, officials at the ministry said.
The government on Wednesday estimated rice exports in the 11 months to ease 4.4 percent year on year to 3.72 million tonnes but forecast turnover would jump 21.6 percent to $862 million.
The agriculture ministry has projected paddy output next year to rise slightly to 36 million tonnes from an estimated 35.5 million tonnes this year.