Pressing rice demands from China and solid loadings at Vietnam's key port have kept local prices of the grain firm and prompted exporters to seek delays in deliveries, traders said on Wednesday.
A Chinese official said this week one province would sell 2.5 million tonnes of its rice reserves to help ease domestic prices off seven-year highs.
"Prices in Vietnam have yet to fall as China is still in the market. Local prices could only soften in a week or two when the number of vessels now loading decreases," said a trader in Ho Chi Minh City.
The agriculture ministry said last week that Vietnam, the world's second-largest rice exporter, after Thailand, was unable to meet China's rice demand.
China is forecast to buy up to 400,000 tonnes from Vietnam for the whole of 2004 and so far this year has imported 15,000 tonnes of Vietnamese rice, state media as saying on Wednesday quoted Vietnam's trade ministry.
Eighteen vessels are loading this week at Saigon Port around 290,000 tonnes of rice for Iraq, Africa, the Philippines and Iran. Eight other vessels have completed loading 107,170 tonnes for Malaysia, Ukraine, Iraq, Africa and the Philippines.
Saigon Port, Vietnam's largest, has seen rice loadings onto four to six vessels a week in the previous months, but from March activity has picked up along with the peak of the country's key crop harvest in the Mekong Delta rice basket.
Farmers in the delta will finish the harvest in mid-April. "There are not enough barges to take rice from warehouses to ships," said another trader in Ho Chi Minh City.
"Exporters dare not sign new deals also because they have to procure rice from farmers while the farmers do not sell but wait for higher prices."
Domestic prices in the delta were quoted this week at 1,800-2,300 dong (11.5-14.6 cent) per kg, unchanged from last week but up from 1,700-1,900 dong a month ago.
The higher local prices have pushed indicative export quotations of the five percent broken grade rice to $236-$245 a tonne, FOB Saigon Port, from $218 last week.
The 25 percent broken rice was also quoted for reference at $220-$225 a tonne on Wednesday, from $200-$203 a week ago.
Traders said many exporters had asked foreign buyers for delays in loading or were raising the contracted prices.
Due to tight supplies and firming prices, Vietnam has rejected a request by the Philippines for around 100,000 tonnes of the grain to be delivered in addition to the 410,000 tonnes it was awarded to supply at a Manila tender last month.
Vietnam's rejection has prompted Manila to plan another tender next month to buy 140,000 tonnes of rice.
"It is not clear if Vietnam would send anyone to that tender given the current tight supplies," said the first trader.
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