Vietnam to sell 400,000 tons of rice to Philippines

Hanoi - Vietnam has won a contract to export 400,000 tons of rice to the Philippines, authorities said Wednesday. Officials at the Vietnam Food Association confirmed Vietnam had won four out of six 100,000-ton lots to export to the Philippines at an auction held Tuesday. The other two lots went to South Korea and Germany.

The rice will be delivered between February and May at an average price of about 650 dollars for Vietnam 25-per-cent broken white rice, the state-run newspaper Thanh Nien reported.

Domestic rice prices in Vietnam have risen sharply in recent days on rumors of shortages. Unhusked rice has risen to 5,000 dong (0.28 dollar) per kilogram, from 4,000 dong two weeks ago.

Nguyen Ngoc Nam, head of the Tien Giang Food Company, said some companies had failed to stockpile enough rice to meet their export contracts and were rushing to buy, driving up prices. Other food executives blamed speculative hoarding by farmers.

But Nguyen Thanh Bien, the deputy minister of industry and trade, said the domestic price was simply following rising world rice prices, the official Vietnam News reported. Bien noted erratic weather and the shift of India and the Philippines from exporters to importers.

Bien said Vietnam would still have 1 million tons of rice in stock after this year's exports are complete, and expects an additional 700,000 to 1 million tons from its winter-spring crop.

Vietnam exported 5.7 million tons of rice in the first 11 months of this year, with revenues of 2.3 billion dollars.

In 2008, Vietnam exported 4.6 million tons of rice, earning 2.9 billion dollars. That was double the previous year's earnings, due to high global prices that hit 900 dollars per ton in May.