Vietnam Rice Trade Ends on Manila Deal

Posted by Reading Time: 3 minutes

HANOI – Vietnamese rice exporters stopped trading a popular grade of rice on news that the Philippines had already placed an order to buy one million tons of the grain, although local authorities from both sides remain quiet on the deal.

Traders in Vietnam and in the Philippines told Reuters that the order amounted to 1 million to 1.5 million tons of rice beginning February with prices set at US$380 per ton, which includes cost and freight.

The Philippines is the top rice buyer on the global market and annually imports 10 percent of its rice needs. Last year, when the country bought 2.3 million tons of rice,prices spiked to unprecedented highs and triggered a global food crisis.

Manila had learned its lesson from last year’s crisis and has already made a deal to guarantee this year’s 1.5 million tons of rice from Hanoi, the world’s second-biggest exporter of the grain.

The Vietnam Food Association’s general secretary, Huynh Minh Hue and Philippine Agriculture Secretary Arthur Yap did not confirm nor deny the reports.

Vietnamese exporters would no longer quote prices for the popular 25-percent broken grade of rice after news of the deal.

“The 25-percent broken grade is now the ban zone,” a trader told Reuters, adding that a floor price set for the grade at $370 per ton, free on board, about 7.0 percent above current market levels of $345 per ton.

Vietnam’s food association has also set prices for US$400 per ton for 5.0-percent brokens, US$390 per ton for the 10-percent brokens and $380 for the US15-percent brokens, free on board.

The largest crop in the country will be on March, with mostly higher-quality 5.0-percent brokens and 10-percent brokens.

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