Vietnam rice limit on new deals

Vietnam has limited new rice export contracts, turniing most buyers away and causing prices to ease slightly, traders said on Wednesday. The Vietnam Food Association, the industry body, told exporters last week it has stopped approving new contracts, a must for shippers to clear customs procedures for rice loading.
"Exporters should focus on completing loading under existing contracts while new deals should wait for further notice from the government," an official at the Ho Chi Minh City-based association said.
She said the limit was set after Vietnam signed deals for a total volume of 4.5 million tonnes, equal to the country's export target for the year. Vietnam, the world's second-largest rice exporter, is capable of shipping 5 million tonnes of the grain annually.
"But this restriction policy is not consistently upheld as some contracts have been approved recently case by case," a trader with a foreign firm in Ho Chi Minh City said. He said a European trading house signed a contract last week to buy 20,000 tonnes of 5 percent broken rice from the Mekong delta province of An Giang.
"An Giang has not been exporting much rice so far this year so the provincial authorities have written to the association and obtained the export clearance," he added.
LOWER PRICES Overall, the restriction has prompted indicative export prices to ease slightly this week, traders said. The 5-percent broken rice now eased to $300 to $302 a tonne, free-on-board Saigon Port on Wednesday, from $302-$305 a tonne last Wednesday.
The 25-percent broken variety stood unchanged at $285-$287 a tonne. A kg of paddy in An Giang eased to 2,950 dong and 3,100 dong (18-19 US cents) this week, from 3,000-3,100 dong last week. Mekong delta farmers have started harvesting their summer-autumn crop and the harvest is expected to peak between July 15 and late August, traders said.
The fresh grain stood at 2,600-2,800 dong per kg. The summer-autumn crop is the delta's second-highest yielding crop after the winter-spring crop. The Agriculture Ministry has forecast the summer-autumn crop paddy output to fall 3 percent from last year to 6.4 million tonnes as farmers cut their planting area by 11 percent to 1.5 million hectares (3.7 million acres).
January to June rice exports also fell 18.9 percent from a year earlier to 2.32 million tonnes, government figures showed. Industry officials said a shortage of vessels due to higher freight has triggered a lower export volume. This week five vessels were loading 50,800 tonnes at Saigon Port for Africa and the Philippines. Another 10 vessels left the port with nearly 62,000 tonnes for the Philippines and Malaysia.
Meanwhile state forecasters said a tropical low pressure system now evolving 300 km east of Vietnam's central coast may bring heavy rain to the region late this week.