The decline was alarming as many importers had no plans to buy, Vietnam Food Association deputy Chair Pham Van Bay was quoted as saying in the report in the government's online newspaper (

Slowing exports, at a time when the harvest of a major rice crop in Vietnam's Mekong Delta food basket is due to peak in two weeks, could lead to a huge build-up in supply and trigger a fall in domestic prices.

The projected volume is lower than a previous industry forecast of around 1.1 million tonnes made in late January.

Vietnam exported 627,000 million tonnes of rice in the first two months of this year, already a fall of 43 percent from the same period last year, the report cited data from the food association as saying.

The country exported 1.8 million tonnes of rice in the first quarter of 2011, the report said.

"Import demand is thin. There are markets which have no import plans yet, while domestic rice production is facing difficulties," Bay was quoted as saying.

The winter-spring crop harvest in the Delta is expected to peak from March 15, the report said.

The association has requested its members, which are mostly rice export companies, to keep their export prices and the floor on rice export prices flexible to ensure no damage to export firms and farmers, the report said.

The HCM City-based food association oversees contracts, prices and loading of Vietnam's rice exports.

Last month, it lowered the floor price of Vietnam's 25-percent broken rice to $420 a tonne, free-on-board (FOB) basis, from $455 previously in a move to boost exports.

Indicative prices of the variety, Vietnam's most common grade for export and which is often bought by the Philippines, have since fallen to $375 a tonne, FOB, on February 22 on thin buying demand before recovering to $385 last week.

Traders said foreign buyers, including major traditional importers of Vietnamese rice such as the Philippines and Indonesia, were still waiting for the Mekong Delta harvest to peak and prices to fall before making their purchases.

Indonesia, which said it would import 2 million tonnes this year, has yet to make any move while demand for Africa, another major buyer of Vietnamese grain, has fallen by two thirds so far this year from a year earlier.

Reuters - March 6, 2012