Vietnam will lower the floor price for 25 percent broken rice, the most common grade for export and often bought by the Philippines, by 3 percent to $480 a tonne early next week, an industry body said. The floor for 5 percent broken rice will also drop nearly 4 percent to $500 a tonne, free-on-board, from $520 now, the Vietnam Food Association said in a statement seen on Saturday.
The new floors come into force from Monday, it said. The industry body cuts the minimum requirement for rice export prices before the harvesting of Vietnam's largest rice crop peaks early next month as traders said foreign buyers were still waiting for price falls before making new purchases.
The lower floor for the 25 percent broken rice may attract the Philippines, Vietnam's top rice buyer, to finalise its grain import plans for this year after a record purchase in 2010. The Philippines may buy less than 1 million tonnes of rice this year, less than recommended by a government panel, given forecasts of a good first-quarter crop of the national staple, the Agriculture secretary said on Wednesday.
The food association raised the floor for the 25 percent broken rice to $495 a tonne last month to prepare for deals with Manila, but the latter had not rushed to buy, while Indonesia surprised the market by buying 820,000 tonnes of Thai rice. Mekong Delta farmers would finish harvesting 650,000 hectares (1.61 million acres), or 42 percent of the total winter-spring crop, by end-February before the harvest peaks in early March, the Vietnam Food Association said in its monthly report. It said yield would range between 6.3-6.5 tonnes per hectare, meaning Vietnam could get at least 4.1 million tonnes more of paddy, or 2 million tonnes of milled rice, by the end of the month.