VFAS chair Truong Thanh Phong told a review meeting held on Friday in HCM City that "the association is asking for the government's approval for raising the export target to between 6.4 and 6.5 million tonnes."

Rising demand and higher prices on the global market are encouraging exporters, he said at the meeting to look at food traders' performance in the first seven months of the year.

"There has been growing demand for rice from Africa, Middle East, and Asia, owing to an increase in wheat prices that help shift consumption in those countries to rice that has more competitive prices," he said.

In Asia, VFA expects to sell rice to Indonesia at a few hundred thousand tonnes after the country re-starts its rice import, plus 220,000 tonnes that exporters are going to sell to Bangladesh on August 13. The price of Vietnamese 5 percent-broken rice has increased by $20-30 per tonne since July to $375 per tonne, and that for 25 percent-broken rice also has enjoyed the same increase to $330 a tonne.

VFA said the rice in stock is currently at 1.3 million tonnes.

The government since last June has approved for food enterprises to buy one million tonnes of rice in the summer-autumn crop for temporary storage to buoy up sagging prices on the local market. To date, VFA members have bought over 460,000 tonnes, which has also helped push up local prices to between 4,100 dong and 4,450 dong per kilo compared to the range of 3,500-3,800 dong weeks ago.

Phong also noted that prices had increased after Chinese dealers' intensive purchases in July.

"Chinese dealers came to rice barn and buy almost everything, regardless of quality. Furthermore, in June and July, traders bolstered cross-border trade with China that make rice trading in the Mekong Delta more bustling," he said.

According to VFA, official trade with China so far has reached 600,000 tonnes, while most of rice trade with China is via unofficial cross-border activities.

"Continuing natural disasters in China recently has raised worry that the neighbouring country this year needs around 14 million tonnes of rice, and if China starts buying to offset the shortfall, both global and local markets will certainly witness sharp price increases and big turbulence," he added.

Regarding the Philippines' request to delay its rice shipments for another one or two months due to excessive rice stock in its national warehouses, Phong assured that this would not hit Vietnam's rice trade though this country is the biggest importer of Vietnam's rice.

"VFA has been asked by the Philippines' National Food Authority to delay delivery of the remainder of only 51,300 tonnes out of 1.6 million tonnes contracted till September and this will certainly not affect rice export this year," he said.

The Saigon Times Daily - August 12, 2010