UPDATE 1-Africa's rice demand keeps Vietnam prices stable

Wed Jun 22, 2011 5:09am GMT

[-] Text [+]

(Adds details, prices)

By Ho Binh Minh

HANOI, June 22 (Reuters) - Vietnam has contracted to sell around 100,000 tonnes of 25 percent broken rice to several African nations so far this month, helping to keep prices stable at the start of a harvest in the Mekong Delta, traders said on Wednesday.

The volume is small compared with around 1.5 million tonnes Africa buys annually from Vietnam, the world's second-largest exporter of the grain after Thailand, but the deals and have halted a price fall in earlier market expectation.

"The harvest is now under way, but prices remain stable thanks to these deals," a trader with a foreign company in Ho Chi Minh City said, noting that buyers had earlier expected prices to soften when the summer-autumn crop harvest starts.

He said three foreign trading firms have signed contracts in the past two weeks to buy the 25-percent broken rice for shipment from next month and in August. The contracted price was at the same level as market offers this week, he added.

Vietnam's 25 percent broken variety stood this week at $430 a tonne, free-on-board (FOB) basis, against $420-$435 last week, even though farmers have been harvesting the summer-autumn crop, the second-largest in the Mekong Delta food basket.

The 5 percent broken rice widened to $460-$470 a tonne, FOB basis, from $460-$465 last Wednesday.

Traders said they could not know which African nation will be the destination of the grain until ships arrive for loading. Continued...

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