Vietnam lowers rice prices to take on India in dull market
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Vietnam has been vying with India to sell more rice this week by cutting prices to attract buyers in a largely inactive market ahead of the year-end holidays, traders said.
Vietnamese 5-percent broken rice dropped to $405-$410 a tonne this week, free-on-board (FoB), from $420-$440 a tonne aweek ago. Its 25-percent broken rice also eased to $375-$380 a tonne FoB, from $390-$410 last Wednesday.
"Exporters need to repay bank debt and also prepare warehouses for the next major harvest," a trader in Ho Chi Minh City said, referring to the winter-spring crop which will be harvested from late February.
Vietnam has yet to secure any new contracts for 2013, and exporters may have to lower prices to compete with cheaper grain offered by Myanmar or Pakistan, the Vietnam Food Association said. Myanmar rice was offered at $370 per tonne, while Pakistani grade was offered at $420 per tonne, traders said.
India was also keen to sell as the government pressed an export policy in a bid to reduce high stocks.
On December 1, India's rice stocks at government warehouses were 30.6 million tonnes, compared with a target of 5.2 million tonnes.
Indian 5-percent common rice varieties were quoted at $375-$440 per tonne FoB, almost the same as the previous week in the absence of any major export deals before Christmas.
"The export market will remain dull as the Christmas holidays approach," said a Delhi-based trader.
Traders said about 10.5 million tonnes of common rice had been exported from India since September 2011 when overseas sales were allowed by the world's second biggest producer for the first time in four years.
That would make India the world's biggest rice exporter for the first time since 1983, taking the crown from Thailand, which is now believed to be the third biggest.