Rice prices in Vietnam will persist on a downward trend in the next few weeks in the absence of demand even after a rice industry body stopped setting a floor price for high-quality 5 percent broken grain, traders said on Monday. A lower price in the world's second-largest exporter of rice after India could boost buying demand in Asia and Africa and also help Vietnamese exporters compete with India, which seized the top rank from Thailand in 2012, partly thanks to its cheaper grain.
Vietnam's 5 percent broken rice has now eased to $400 a tonne, on a free-on-board basis, from $405 to $410 a tonne prior to the March 21 removal of the floor price, traders said, citing a Vietnam Food Association announcement. The announcement was circulated only to member companies and Reuters obtained a copy on Monday.
"Keeping no floors on the 5 percent broken rice, the association wants them to be able to quicken the rice export," said a trader at a foreign firm in Ho Chi Minh City. The floor for the 5-percent broken rice had been set at $410 a tonne since February 6. By March 21, the floor for lower-grade 35-percent broken rice edged up nearly 1.4 percent to $370 a tonne, on an FOB basis, the association said. "The price differences for other grades are to be decided by businesses," its announcement said.