Hanoi, April 24 - Vietnam's food industry and government trade officials have agreed to allow rice exporters to resume talks to sign new deals, effectively lifting curbs in place since late February, an official said.
The move looks set to swell a tide of rice supplies after news this week that largest producer Thailand plans to sell 3.76 million tonnes from stocks and signals emerged that India, which competes with Vietnam to be the second-largest producer, could lift a rice export ban after May national polls.
Any new deals would bridge a gap between Vietnam's annual export target of 5 million tonnes this year, and first-half sales already concluded to the tune of 3.7 million tonnes.
"We have agreed in principle to let exporters resume talks soon for their contracts, but we will need to discuss more details of how to let them do it," an official from the Vietnam Food Association told Reuters on Friday.
But there was little initial market reaction, since the industry has been keeping a floor under rice export prices unchanged since late February, with the 5 percent broken rice standing at $460 a tonne, free-on-board Saigon port [ID:nHAN50430].
Indicative quotations were about $20 a tonne lower after the end of a major crop harvest in the Mekong Delta food basket.
The Vietnam Food Association had banned new deals for shipment through to June, saying the targeted volume of nearly 3.7 million tonnes to be loaded in the first half of this year had been achieved. [ID:nHAN430938]
From Feb. 26, it only granted loading clearance to contracts scheduled to ship between July and September, which traders dismissed as too far off for the rice export business.
Since 3.7 million tonnes have been committed for loading in the first half of this year and several contracts have been signed for loading in the last six months, Vietnamese exporters would still be able to sell nearly 1.3 million tonnes, the food association official said.
"But this volume would be of both government deals and company-to-company deals, so we need to discuss more technical matters," said the official, who declined to be named because he was not authorised to discuss the matter.
He also declined to name potential buyers, but the Philippines, Malaysia, Indonesia, Cuba, Iraq and several African countries have been frequent importers of Vietnamese grain.
The Philippines, the world's largest rice importer, has already signed a deal to buy 1.5 million tonnes of milled rice from Vietnam, part of the 1.8 million tonnes it aims to import this year. Manila has said it will allow private firms to buy the remaining 300,000 tonnes volume overseas.
The Vietnamese government has assigned Vinafood 2, the country's top rice exporter, to handle demand in the Philippines, Malaysia and Indonesia, while number two Vinafood 1 deals with Iraq and Cuba. Their contracts are government-to-government.
Other firms compete for company-to-company contracts.
The food association chairman, Truong Thanh Phong, who also heads Vinafood 2, asked the government on Thursday to allow exporters to actively seek new contracts for the 1.3 million tonnes under the annual target of 5 million tonnes.
Vietnam has loaded nearly 400,000 tonnes of rice so far this month, bringing shipments since the year began to nearly 1.98 million tonnes, a surge of 78.4 percent from the same period last year, the food association said.
"Priority for export will be given to major rice-growing provinces while the rice to be sold should also spread reasonably among exporters," an association official said.
Mekong Delta farmers have finished harvesting 1.6 million hectares (3.95 million acres) under the winter-spring crop, with paddy output rising an estimated 10.8 percent from a similar crop last year to 10.4 million tonnes.
Of three crops grown each year in the delta, winter-spring paddy has the best quality and is often mostly for export.