The world's third biggest exporter of rice, Vietnam made its one of the first ever rice purchases from rival India, owing to surge in local prices amid limited domestic supplies, as told to Reuters by four industry officials.
As prices jumped to a nine-year high, supplies have been tightening in Asia which could lead to an even further increase in rice prices in this year. Due to this situation, even the traditional customers of Vietnam and Thailand could be easily forced to switch their rice purchases to the world's biggest exporter of the grain, India.
Contracts have been made with Indian traders to export 70,000 tonnes of 100% broken rice for January and February shipments at around $310 per tonne on a free-on-board (FOB) basis, the industry officials said. "For the first time, we are exporting to Vietnam," B.V Krishna Rao, president of the Rice Exporters Association, told Reuters on Monday.
Vietnam's 5% broken rice is offered around $500-$505 per tonne, significantly higher compared to Indian prices of $381-$387, making Indian prices much more attractive. Aggravating the situation, continued Philippine buying has dwindled supplies in Vietnam, giving rise to concerns of food insecurity in Sub-Saharan Africa where population growth has led to more import demand. Vietnam itself has also begun to stockpile rice, even since the global pandemic fearing food shortages.
