Indonesia, Bangladesh markets lift Vietnamese rice prices

Indonesia has been in talks to import between 400,000 and 600,000 tonnes of rice from Vietnam to capitalise on lower prices, with shipment possible in the third quarter of this year, traders and a state-run newspaper said on Wednesday. The official Vietnam Economic Times newspaper said if the government-to-government contract is reached, 600,000 tonnes of rice would be shipped in August.
It gave no details on pricing or the rice grades. "They have held talks, but I heard the volume is 400,000 tonnes," a Vietnamese exporter in Ho Chi Minh City told Reuters, while another two traders said the targeted volume could be between 400,000 tonnes and 600,000 tonnes.
The news run counter to a comment in late May by an Indonesian farm ministry official, who said the country saw higher paddy output of 70.6 million tonnes this year, leading to greater surplus and no need for further imports in 2011. Traders at a recent rice conference in Bangkok had said that high domestic rice prices in Indonesia could force the government to import the staple. Thai traders said on Wednesday that Indonesia may want to buy from Vietnam due to lower prices.
Indonesia surprised markets early this year by buying around 1 million tonnes, or five times as much rice as expected, in a move to boost stockpiles and help moderate food prices. High food prices could still hurt growth in Southeast Asia's top economy and policymakers fear they could stir social unrest, so improving self-sufficiency has become a top policy priority.
Economists say Indonesia's inflation, which slowed in May to a seven-month low of 5.98 percent from a year ago and is seen easing further this month, could drop towards 5.0 percent by end-year assuming there are no moves to raise fuel costs. But a fuel price hike or a ban on private cars using cheap fuel expected later this year could push it back towards 6.0 percent.
SUPPORTIVE TO PRICES The second trader said the news, once confirmed, would lift Vietnamese rice prices even though a crop harvest in the Mekongg Delta has been accelerating Officials at the Vietnam Food Association could not be reached for comments.
Rice prices in Vietnam have already risen this week ahead of an industry plan to buy 2 million tonnes of summer-autumn rice between July 15 and August 30 for a three-month stockpile. The 5 percent broken rice rose to $475-$480 a tonne, free-on-board (FOB), from $460-$470 last week and the 25 percent broken rice also rose to $435-$440 per tonne, from $410-$430 last week.
The Vietnam Economic Times said Vietnam has also concluded talks to sell 200,000 tonnes of rice to Bangladesh, including 50,000 tonnes of parboiled rice and 150,000 tonnes of 15 percent broken rice, with the latter priced at $465 a tonne, FOB basis. Shipment will start in July, the newspaper said without giving the source of the information. Vietnam will supply 1 million tonnes of rice to Bangladesh a year, the Vietnamese government said in April after signing a memorandum as part of the South Asian country's efforts to ensure stable food supply.