The benchmark price of Vietnamese rice is likely to be stable between $380 and $500 a tonne next year barring unforeseen natural disasters or poor weather, one of the country's top 10 exporters said on Wednesday.
The past three years have witnessed some of the most volatile commodities prices ever, rice included. Vietnamese rice soared to around $1,000 a tonne in May 2008 before slipping to around $350 a tonne in April this year.
Tran Thanh Van, deputy chief executive of the Mekong Delta-based exporter Gentraco Corp, estimated that major buyers had prepared 30 percent to 50 percent of their annual domestic demand, which would remove some of the urgency that exacerbated price movements in recent years.
"Major price movements will no longer be expected in the coming time because of these preparations," Van told Reuters in the river town of Thot Not, one of the Mekong Delta's main logistics points for rice transportation.
The Mekong Delta produces more than half of Vietnam's paddy rice output, expected to reach 39.1 million tonnes this year from 38.9 million tonnes in 2009. Grain from the delta's 12 provinces accounts for 90 percent of the country's total rice export.
Van said benchmark 5 percent broken rice stood at $475 a tonne, while 25 percent broken rice was $445 a tonne, and Gentraco was looking to raise the quotations by $10 a tonne, given low stocks.
The last time the 5-percent broken rice traded at $500 a tonne was during the first week of January 2010.
Vietnam carried over 1.4 million tonnes of milled rice from the previous harvest, but had already begun depleted it, and Van said the country's current stocks were about 1.1 million tonnes.
Gentraco was now holding 30,000 tonnes of rice in stock, or around 10 percent of its annual export target for 2010, Van said. Last year the company shipped 250,000 tonnes of rice.
Stocks are likely to continue to wane despite a minor harvest starting within the next three weeks.
Supply will pick up from late February when Mekong Delta farmers start harvesting the winter-spring rice crop, the country's largest crop mostly used for export.
Paddy output of the crop is expected to remain unchanged at around 10 million tonnes, as farmers stepped up using fertiliser to cope with the impact of low flooding this year, a leading rice industry researcher said on Tuesday.
The Vietnam Food Association, which is in charge of regulating the country's rice exports, has already stopped approving company-to-company contracts with shipment from November onwards.
The association has also tried to support prices by imposing an export price floor and then raising it in October.
Vietnam has secured deals for a record 6.8 million tonnes of rice so fare this year, 6.5 million tonnes of which would be shipped, which would be a record, industry officials said. The country exported 6 million tonnes of the grain last year.
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