Vietnamese Rice Prices Propped by Manila Deal

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Jan. 21 – Prices for Vietnamese rice slated for export increased by 3 to 4.9 percent when exporters start loading 500,000 tons bound for the Philippines starting next month.

The Vietnamese rice shipment is expected to arrive in Manila by February and March as part of a deal that will ship a minimum of 1 million tons of grain.

"Food companies have prepared stocks for the shipment so the price rise won't affect their loading but indicative prices have gone up, anyway," a trader at a foreign firm in Ho Chi Minh City told Reuters.

Prices of the 25 percent broken grain increased to US$330 to US$335 per ton, free-on-board basis, from last week's US$320.

The high grade 5.0 percent broken rice also reported higher prices at US$395 per ton, free-on-board, from the previous price of US$390.

"Several shippers started building stock in December so they are unlikely to face supply shortages while loading the 500,000 tons, but they could face a scant supply of broken rice to make the 25 percent broken variety in the longer run," another trader told Reuters.

It will be late February before farmers will be able to harvest their highest yielding, best quality winter-spring crop.

The grain for the Manila shipment will come from the summer-autumn crop and the third minor crop.

Last week, it was reported that Manila had agreed to buy at least 1 million tons from Vietnam at US$380 a ton, cost and freight, equivalent to the price of Vietnamese 25-percent broken grain.