News & Events

VN likely to bag bulk of rice order

Business Day, February 25, 2005

Vietnam, the world's second largest shipper of rice, is likely to corner a big share of the 500,000 tonnes of rice being sought by the Philippines' next week, traders said on Thursday.

They said Vietnam had a bigger chance of winning a larger volume due to cheaper prices and because the rice exporting arm of the government of Thailand, the world's largest shipper, was not expected to participate.

The Philippines is seeking 500,000 tonnes of 25 percent or 15 percent broken rice from China, Thailand, Vietnam, Pakistan or the United States for April to May arrival.

Nine Vietnamese firms, including Vietnam Southern Food, or Vinafood 2, are expected 10 join at least 23 private and state companies in the tender.

Traders said they did not expect offers of Chinese rice because of a lack of surplus stocks, while Pakistani exporters said they may not join due to high domestic prices, freight costs and stiff standards set by the Philippines.

Officials in Manila said the United States was included as a possible point of origin because the Philippines may opt to buy 45,000 tonnes of iron-fortified rice.

US exporters have difficulty competing with their Asian rivals because of the freight charges to deliver to the region.

"The most competitive origin now is Vietnam because of its price,” one trader said. "Thai rice is more expensive because essentially it's a premium origin, it has many clients.”

Vietnam's 25 percent broken rice eased to $247 per tonne, free-on-board basis, Saigon Port, from $250-$252 per tonne last week due to abundant supplies from the ongoing harvest and lack of export demand, traders in Hanoi said. - Reuters