Vietnam will export 300,000 tonnes of rice to M'sia(update)

HANOI: Vietnam will export 300,000 tonnes of rice to Malaysia in
2012, part of its plan to keep exports steady and retain its market
share in the face of competition from cheaper Indian and Pakistani
grain.
Vietnam targets exports of 7 million tonnes of rice next
year, matching the record-high volume expected in 2011, a state-run
newspaper quoted a government minister on Tuesday as saying.
Exporters
now have 700,000 tonnes in warehouses for export in early 2012, down
from 1.5-2.0 million tonnes in their usual year-end stock in previous
years due to slowing overseas sales, Deputy Agriculture Minister Diep Kinh Tan was quoted as saying by Vietnam Agriculture newpaper.
Vinafood
2, Vietnam's largest rice exporter, has secured a contract to ship 5
percent broken rice to Malaysia, state-run Voice of Vietnam radio said.
Ho Chi Minh City-based Vinafood 2, or Vietnam Southern Food Corp,
sold the rice at a good price and will start loading from March 2012,
the radio said in its morning news bulletin, without giving details.
The
deal would be worth nearly $150 million, based on a free-on-board (FOB)
price of $490-$495 a tonne on Tuesday, a fall from $520-$550 last week.
"Prices
of Vietnamese rice could hold steady between now and Tet thanks to the
deal, but if there is no further (foreign) demand, prices may drop again
as farmers will have to unload their stock for cash," a Ho Chi Minh
City-based trader said.
He was referring to Vietnam's biggest festival to mark the Lunar New Year, which arrives on Jan. 23, 2012.
The
contract is crucial at this time as it can help boost prices after the 5
percent broken rice, Vietnam's best quality grain among its export
grades, dropped to its lowest in more than four months last week on thin
demand.
Malaysia, Vietnam's fourth-largest rice buyer after
Indonesia, the Philippines and Cuba so far this year, has imported
around 400,000 tonnes from Vietnam in the first 10 months, up from
around 300,000 tonnes in the same period last year, Agriculture Ministry
data show.
PRESSURE BEFORE MAJOR HARVEST
Loading for
Malaysia would coincide with the harvesting time of the winter-spring
crop in the Mekong Delta food basket, Vietnam's biggest among its three
rice crops annually.
The crop's paddy output is projected to rise
3.8 percent from this year to 11 million tonnes. Most of its grain is
used for export.
In a separate policy to help ensure stable
domestic market prices for farmers, Tan said the agriculture and trade
ministries would soon seek government approval on soft loans for
exporters to buy rice for stockpiling.
The plan, if in place,
could help arrest domestic price declines when supplies jump at the
harvest peak. Vietnam considers rice a strategic commodity as it is a
staple for many in the country of 87 million and affects the lives of
millions of farmers.
Unlike Thailand where the government has
been buying rice under an intervention scheme that gives farmers a big
increase in prices, Hanoi has allowed major exporters to conduct the
stockpiling in recent years to secure stable domestic prices.
Vietnam
is the world's second-largest rice exporter after Thailand, where
export prices have risen since July because of state intervention.
Thailand is expected to see its market share drop by about half next
year as its prices are too high compared to grains sourced from Vietnam
and India.
Thai 5-percent broken white rice stood at $595 per tonne, FOB, compared with India's offer of $450-$470 a tonne.
Domestic
prices in Vietnam fell during the first 10 days of this month, after a
Vinafood 2 executive said exporters needed to cut prices to attract
buyers and avoid a drop in domestic prices when the largest rice crop is
harvested early next year.
"Exporters are lowering offer prices
not because they want to export more but because of rising pressure (of
supply) ahead of the next harvest," the trader in Ho Chi Minh City said.
Due
to thin loading demand, buying agents who sell rice to exporters have
stopped their domestic purchase, causing domestic price falls in the
past 10 days, traders said.
Rice grade 1, used to process the
5-percent broken grain, fell to 7,800-8,050 dong (37-38 U.S. cents) per
kg in the Mekong Delta late last week from 9,450-9,600 dong on Nov. 30, a
drop of around 14 percent.
But prices edged up to 8,050-8,200 dong per kg on Tuesday. ($1=21,005 dong) - Reuters
Earlier report
HANOI:
Vinafood 2, Vietnam's largest rice exporter, has secured a contract to
ship 300,000 tonnes of 5 percent broken rice to Malaysia, state-run
Voice of Vietnam radio said on Tuesday.
The Ho Chi Minh City-based exporter will start loading under the deal from March 2012, the radio said.
Vinafood
2, or the Vietnam Southern Food Corp, sold the rice at a good price,
the radio said in its morning news bulletin, without giving further
details.
The contract is crucial at this time as it can help
boost prices after the 5 percent broken rice, Vietnam's best quality
grain among its export grades, has fallen to the lowest level in more
than four months last week due to thin buying demand.
The deal would be worth $156 million, based on a free-on-board price of $520 a tonne quoted last week.
Vietnam
is the world's second-largest rice exporter after Thailand. The two,
where export prices had risen since July following a Thai government
intervention, have been losing market shares so far this year as India
and Pakistan offered cheaper grain.
Domestic prices in Vietnam
fell during the first 10 days of this month, after a Vinafood 2
executive said Vietnam had a record low volume of rice for loading in
early 2012 and exporters needed to cut prices to attract buyers and
avoid domestic price falls.
Rice grade 1, used to process the
5-percent broken grain, fell to 7,800-8,050 dong (37-38 U.S. cents) per
kg in the Mekong Delta food basket late last week from 9,450-9,600 dong
on Nov. 30, or a fall of around 14 percent.
But prices recovered
slightly this week, edging up to 8,100-8,200 dong per kg on Monday.
Latest prices were not immediately available early on Tuesday.
Malaysia is Vietnam's fourth-largest rice buyer after Indonesia, the Philippines and Cuba so far this year.
It
has taken delivery of around 400,000 tonnes from Vietnam in the first
10 months of this year, up from around 300,000 tonnes in the same period
last year, Vietnam's Agriculture Ministry data show. - Reuters