Hanoi, Dec 3 - Vietnam suspended several rice export contracts on Wednesday to stop prices from sliding further below regulated levels as demand weakens, traders and an industry official said.
Two traders at foreign trading firms in Ho Chi Minh City said the Vietnam Food Association had told exporters to stop dealing in all rice grades.
"They want prices to stay at a high level so that Vietnam could sell at good prices to the Philippines or Indonesia," one said.
"At the moment it seems that contracts of some companies which were done below the minimum export prices have been rejected by the Vietnam Food Association," another trader at an international trading house in Thailand said.
But an official at the Ho Chi Minh City-based food association told Reuters that there were no bans on rice exports.
"Since there are some companies that sold rice below the regulated level, we only stopped several suspicious contracts," the official who declined to be identified by name said by telephone. "All selling and buying activities are as usual."
Exporters need to register their new contracts with the association before they can go ahead with loading.
The food association official said the export price for Vietnamese 5-percent broken rice was now regulated at $450 a tonne, free-on-board, and that of the 25 percent broken grain was $420 per tonne.
But traders said those levels were unrealistic.
"Nobody can trade at those prices," one Vietnamese trader with an European trading house in the southern city said.
He said Vietnam, which now has ample stocks of the 25-percent broken rice, was longing to sell to the Philippines, the world's biggest rice importer.
Early last month, Philippine's agriculture minister said the country would return to the market in December or January to buy undisclosed volume of rice for 2009 arrivals.
Traders said exporters now had huge stocks and given thin demand from Africa -- the main import market apart from the Philippines and Indonesia for Vietnamese 25 percent broken rice -- prices of the grain have now softened to $300-$320 a tonne, FOB basis.