Vietnam has approved a rice stockpiling plan under which local firms will get soft loans to buy paddy from now to the end of April, a move that will tighten supplies in the world's No 2 exporter of the grain and help boost prices. Vietnam has been struggling to sell rice this year as Thailand offloads a part of its high stocks that have been built up due to a controversial state intervention scheme there. This has led to a shift in demand from African buyers, who are key importers of Vietnamese rice.
Paddy prices eased to 5,100-5,450 dong (24-26 US cents) per kg last week in Vietnam's Mekong Delta where the harvest is peaking, from 5,500-5,800 dong in early February when the harvest began, the Vietnam Food Association said. Companies joining the stockpiling plan will get dong loans at a 7 percent annual rate, the government said in a statement, confirming a report by state-run radio Voice of Vietnam. The government will use around 8 trillion dong ($379 million) to lend to rice companies under the plan, State Bank of Vietnam Governor Nguyen Van Binh was quoted in the statement as saying. The Agriculture Ministry had earlier this year proposed the government allow the stockpiling of 1 million tonnes of rice, or 2 million tonnes of paddy, as harvesting of the winter-spring crop, the country's largest crop, peaks from mid-March.
Vietnam is now eyeing the Philippines' plan to import as much as 800,000 tonnes of rice via a government-to-government deal in a tender that may be held before the end of March. Purchases by one of the world's top rice buyers could support Asian prices of the grain, with Vietnam and Thailand likely to compete aggressively for any new deal. Vietnam's 5 percent broken rice edged up to $380-$385 a tonne, free-on-board basis, on Monday from $370-$375 last week, thanks to the government's approval of the stockpiling plan and the possible purchase by the Philippines, traders said.
Several traders in Vietnam said Manila could open the tender this week, but a spokesman at the National Food Authority, the Philippines' state grains procurement agency, said it was still waiting for government approval and has yet to finalise any dates. Manila, the biggest buyer of Vietnamese rice so far this year, is expected to take delivery of the grain between April and June, a trader in Vietnam said, before the Philippines' lean growing season from July to September. The winter-spring crop in southern Vietnam, incorporating the Mekong Delta food basket, is expected to yield 11.7 million tonnes of paddy, up 1 percent from last year, according to the Agriculture Ministry.
